The Gujarat High Court upheld the validity of a GST audit despite multiple ADT-01 notices, ruling that the audit report issued within three months of actual commencement complies with Section 65 of the CGST Act.
The Gujarat High Court dismissed a writ challenging the validity of a GST audit, holding that repeated issuance of ADT-01 notices does not vitiate the process as long as the final audit report is submitted within three months of the actual commencement of the audit. The court interpreted Section 65 of the Central Goods and Services Tax (CGST) Act, 2017, to prioritize substance over form in audit timelines.
The petitioner had argued that frequent re-noticing prolonged uncertainty and violated principles of fair notice. However, the court found that delays were attributable to non-cooperation and incomplete document submission by the taxpayer. The department had duly recorded the start of audit proceedings, and the final report was issued within the statutory 90-day window from the de facto start date.
Where the actual audit commences and is carried forward due to taxpayer’s defaults, the three-month period runs from the first date of document receipt and verification, not from each reissue of notice.
For practitioners, this underscores the importance of timely compliance with audit requests. Delaying tactics may extend notice cycles but do not nullify eventual findings. Strategic document management and early engagement with audit teams are advised to prevent protracted proceedings.
Citations
- Central Goods and Services Tax Act, 2017, Section 65
