Suresh Kumar Singhal vs. Union Of INDIA

Held

The Court held that Section 19 of the Constitution (One Hundred and First Amendment) Act, 2016, is a transitional provision that saves laws inconsistent with the amended Constitution for a period of one year, unless repealed earlier. However, this provision does not restrict the operation of Section 174(2) of the CGST Act, 2017. Section 174(2) explicitly states that the repeal of previous Acts shall not affect investigations, inquiries, or verifications (including audits) and that such proceedings may be continued or enforced as if the Act had not been amended or repealed. Therefore, the Court found that the impugned notice issued by the Assistant Commissioner of CGST for conducting an audit for the period prior to the CGST Act was not issued without jurisdiction. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Suresh Kumar Singhal, proprietor of M/s Marudhar Transport Company, challenged a notice dated August 10-13, 2018, issued by the Assistant Commissioner of CGST (Audit), Udaipur. The notice informed the petitioner that a Central Excise and Service Tax audit of his unit would be conducted for the period from 2013-14 to June 2017. The petitioner was requested to furnish specified documents and information for this audit. The audit was to be undertaken by a group deputed by the Commissioner in August 2018.

Key Issues

1. Whether the power to conduct audit for the period prior to the commencement of the CGST Act, 2017, survives beyond one year from the commencement of the Constitution (One Hundred and First Amendment) Act, 2016, as contended by the petitioner based on Section 19 of the Constitution Act, 2016? 2. Whether the impugned notice issued by the Assistant Commissioner of CGST, Audit Circle, Udaipur, for conducting audit for the period 2013-14 to 2017-18 (upto June, 2017) is without jurisdiction? Petitioner's Arguments: The petitioner argued that while Section 174(2)(e) of the CGST Act, 2017, allows for continuation of audit functions for previous periods, Section 19 of the Constitution Act, 2016, limits such powers to one year from the commencement of the Act, rendering the notice beyond jurisdiction. Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue. However, the court's reasoning implies that the revenue would have contended that Section 174(2)(e) of the CGST Act, 2017, prevails over the transitional provision in Section 19 of the Constitution Act, 2016, in this context.