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GST – Issuance of Show Cause Notice based on CERA Audit – Evasion of tax - Petitioner challenge the Show Cause Notice issued under the CGST Act, 2017 on the ground that it was based solely on observations of a Central Excise Revenue Audit (CERA) conducted by the Director General of Audit (Central), functioning under the CAG - Petitioner contention that as per the decision in Kiran Gems Private Limited vs Union of India, the CAG or its officials have no jurisdiction to audit private companies like the petitioner - Whether the Show Cause Notice is ultra vires and without jurisdiction as it was based on a CERA/CAG audit which the petitioner claims has no authority over private companies - HELD - the decision in Kiran Gems Private Limited is not applicable in the present case as the CERA/CAG did not audit the petitioner company but only audited the respondents' Department, which is a Department of the Union of India - Merely because the petitioner's returns were examined in the context of the audit of the Department, it does not mean that the CERA/CAG audited the petitioner - the CERA/CAG has the statutory duty to audit the receipts payable into the Consolidated Fund of India, which includes auditing the Departments of the Government. Therefore, the Show Cause Notice cannot be said to be without jurisdiction – Further, the argument about the impugned show cause notice being issued with a “pre-determined mindset” is also entirely misconceived. By simply making an allegation of this nature without any concrete or serious material to support the same, the show cause notice cannot be questioned. A show cause notice, which only records a prima facie opinion, is not like a judgment or an order made after the completion of the adjudication proceedings - the petitioner cannot bypass the rule of exhaustion of alternate remedies available under the CGST Act and approach the High Court directly to challenge the Show Cause Notice - The Writ Petition is dismissed with costs to petitioner
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