In a significant development, the Punjab and Haryana High Court has issued a stay on a contentious GST show cause notice ( SCN ) amounting to over ₹100 crores, issued to Abbott Healthcare Private Limited, a leading pharmaceutical manufacturer. The SCN, styled as DRC-01, was purportedly based on an audit conducted by the Comptroller and Auditor General of India ( CAG ). However, several procedural lapses were identified, prompting the company to challenge the notice through a writ petition.
The SCN in question lacked a Document Identification Number (DIN), was unsigned, and was delivered via email rather than being uploaded on the designated portal. Furthermore, no audit under Section 65 of the CGST Act had been conducted, nor was there a pre-show cause notice issued in Form DRC-01A. The notice also invoked the extended time limit under Notification No. 9/2023, and was issued by a State Tax officer, rather than an officer authorized under Section 73 of the CGST Act.
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Representing the petitioner, Advocate Bharat Raichandani, along with Advocates Mayank Jain and Marmik Kamdar of Khaitan & Co., argued that the notice was fundamentally flawed and lacked legal backing.
They further questioned the legitimacy of the CAG conducting an audit of a private entity, which is beyond its statutory mandate.
The Punjab and Haryana High Court Bench, comprising Justices Sanjeev Prakash Sharma and Sanjay Vashisth, has directed the respondents to clarify the basis on which the CAG conducted the audit. The court has stayed the proceedings related to the SCN and barred the respondents from passing any final orders until the next hearing, scheduled for September 23, 2024.
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