GST Demand Stayed As Audit Report Issued By Unauthorised Officer: Orissa High Court Finds Prima Facie Jurisdictional Defect

The Orissa High Court has stayed further proceedings arising from a Goods and Services Tax (GST) demand-cum-show cause notice issued under Section 73 of the Central Goods and Services Tax Act, 2017, after finding a prima facie jurisdictional defect in the audit process that formed the basis of the demand. The interim order was passed in a writ petition which challenged an audit notice and a consequential demand-cum-show cause. The demand was issued following an audit report communicated during audit proceedings conducted under Section 65 of the GST Act. Senior counsel appearing for the petitioner contended that the audit report was prepared and communicated by a Superintendent, GST and Central Excise, Large Taxpayer Group-2, who was not authorised as a “proper officer” under the GST law to perform such a function. Since the Superintendent was not notified as a proper officer under Section 2(91) of the GST Act for this purpose, the proceedings under Section 73 were alleged to be vitiated. The Senior Standing Counsel for GST fairly conceded before the Court that the legal position pointed out by the petitioner was correct. However, it was submitted that the demand-cum-show cause notice under Section 73 had been issued by a competent authority and that the petitioner could raise all objections during adjudication while time was sought to file a counter affidavit. After examining Sections 65 and 73 of the GST Act along with Rule 101 of the GST Rules, the Division Bench comprising Chief Justice Harish Tandon and Justice M.S. Raman observed that the audit findings must be communicated only by a duly authorised “proper officer.” The Court found that the Superintendent was not so authorised and that the invalidity attached to the audit communication went to the root of the matter. Holding that a prima facie case was made out and that serious prejudice could be caused if proceedings continued, the High Court directed the authorities not to proceed further with the impugned demand notice until the next date of hearing. The matter has been listed for further consideration on January 15, 2026. Case Title: M/s. Ayushi Galvano v. Commissioner (Audit), GST and Central Excise, Bhubaneswar Audit Commissionerate and others Case Number: W.P.(C) No.30871 of 2025 For Petitioner: Rudra Prasad Kar and Asit Kumar Dash For Respondent: Sujan Kumar Roy ChoudhuryClick Here To Read/Download Order

GST Demand Stayed As Audit Report Issued By Unauthorised Officer: Orissa High Court Finds Prima Facie Jurisdictional Defect

Manu Sharma

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