The petitioner is a registered dealer under the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’ for short). In the course of its business, the petitioner is said to have executed certain works contract in favour of one Nirmithi Kendra, Bengaluru Rural District, for which it has received consideration.

2. The case of the petitioner is that the said Nirmithi Kendra is a Government concern and hence petitioner is liable to pay GST at the rate of 12% on the consideration received and it has paid the said amount. However, the respondent authority has audited the petitioner and is demanding 18%. In this regard, an audit report under Section 65 (6) of the CGST Act bearing Ref.No.10200 dated 29.03.2022 vide Annexure – C to the writ petition has been issued by the respondent No.1. Thereafter, respondent No.1 has also issued an intimation of tax ascertained payable under Section 73 (5) of the CGST Act to the petitioner which is dated 13.05.2022 (vide Annexure – G to the writ petition) wherein, it has been observed as hereunder:-

“You are hereby advised to pay the amount of tax as ascertained above alongwith the amount of applicable interest in full by 23.05.2022 failing which Show Cause Notice will be issued under section S73.

In case you wish to file any submissions against the above ascertainment, the same may be furnished by 23.05.2022 in Part B of this Form.”

Aggrieved by the same, the instant writ petition is filed.

3. It is contended on behalf of the petitioner that as Nirmithi Kendra is a government concern it is liable to pay only 12% of the GST for the consideration received and inspite of the submission to respondent No.1, ignoring the same, the audit report at Annexure – C and intimation at Annexure – G has been issued and on the ground that they are illegal, petitioner has sought for quashing of the same.

4. Learned AGA upon instructions submits that the audit report at Annexure – C is only a report under Section 65 (6) of the CGST Act and no recovery proceedings are initiated. Similarly, Annexure – G is only an intimation of tax ascertained payable under Section 73 of the CGST Act and the assessee has been asked to show cause to the said notice and if adequate reasons are show caused, the same shall be considered in accordance with law and only thereafter, a decision will be taken regarding the tax liability of the petitioner and that the instant writ petition is premature and prays for dismissal of the same.

5. Admittedly, Annexure – C is an audit report issued under Section 65 (6) of the CGST Act. Section 65 of the CGST Act, 2017 deals with Audit by tax authorities. 6. Section 65 (6) of the CGST Act, 2017 reads as under:-

“65 (6) On conclusion of audit, the proper officer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings.”

Thus, no recovery is contemplated by the authorities. Upon issuance of an audit report under Section 65 (6) of the CGST Act, it requires further adjudication before holding the petitioner liable for the same, which will be done only after hearing the petitioner.

7. Similarly, Annexure – G is an intimation to tax assessee as payable under Section 73 of the CGST Act and the said intimation itself permits the petitioner to show cause its case before the authority and further action will be initiated only after considering the reply of the petitioner if any. Hence, the writ petition filed by the petitioner has to be considered premature. However, taking into consideration that the petitioner was required to submit its reply to Annexure – G by 23.05.2022, the same is hereby extended to 8.07.2022. Reserving the said liberty to the petitioner, the writ petition is hereby dismissed.