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CERA audit cannot be conducted for the period prior to introduction of GST.

CERA Audit –Without Jurisdiction-- The petitioner prayed for quashing of notice / intimation dated 10.01.2019 that petitioner’s case has been selected for scrutiny / audit by CERA for the period 2015-16 to 2017-18 to the officers of CERA for audit. The petitioner submitted that there is no enabling statutory provision available to the respondents to seek information pertaining to pre and post GST era for CERA audit from a private entity; such action suffers from a jurisdictional error since power to audit being a statutory power traceable to the relevant statute being absent in the present case. The respondent submitted that power to conduct CERA audit has been invoked under the provisions of Section 16 of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service, Act 1971; the said section cannot apply to a private entity as the said Act provides for audit of all receipts which are payable into the Consolidated Fund of India and of each State and each Union Territory. The court observed that in case of a private assessee, Commissioner will refer the matter to an officer to collect the material or Chartered Accountant for the purpose of audit. Thus, for the purpose of audit, material can be collected either by the officer authorized by the Commissioner or by the auditor himself. But, audit will be performed only by the Chartered Accountant. The power of the CAG under Chapter III extends to any office or department of the Government and cannot be construed to extend to a private entity. Held that:- The Hon’ble High Court allowed the writ petition and quashed the intimation letter .
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