Bombay High Court

MS SVS AQUA TECHNOLOGIES LLPversusSUPERINTENDENT, RANGE IV, DIVISION I SHIVAJINAGAR, CGST PUNE II COMMISSIONERATE

Decided: 31 August 2026
Disposal: Disposed Off

Holding

The audit findings communicated under Section 65(6) and Rule 101(5) do not constitute an immediate tax recovery; further action must follow the adjudication provisions of the CGST Act.

Summary

M/s SVS Aqua Technologies LLP filed a writ petition challenging a GST audit conducted under Section 65 of the Central Goods and Services Tax Act, 2017, alleging that the department had proceeded to recover tax without a prior adjudication under Sections 73 or 74. The petitioner argued that such recovery was impermissible, while the respondent contended that the communication was merely an administrative notice under Rule 101(5) of the CGST Rules, which would be followed by a show‑cause notice. The Court examined Rule 101(5) and noted that the audit findings were communicated to the taxpayer in Form GST ADT‑02 as required by Section 65(6). It held that the mere communication of audit findings does not amount to an immediate recovery and that any further action must comply with the provisions of the CGST Act. Consequently, the petition was dismissed as misconceived.

Issues considered

Whether a recovery of tax can be effected directly after a GST audit under Section 65 without a prior adjudication proceeding under Sections 73 or 74 of the CGST Act.
Whether the communication of audit findings under Rule 101(5) of the CGST Rules constitutes an administrative action that precludes judicial review.

Legislation cited

Central Goods and Services Tax Act, 2017 — s. 65, 65(6), 73, 74
Central Goods and Services Tax Rules, 2017 — s. Rule 101(5)

Subjects

GST
audit
Section 65
tax recovery
adjudication
Rule 101(5)
administrative action
writ petition

Judgment

ARJUN                                                                        36-wp 11359-26.doc
MACHHINDRA
KADAM
                               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Digitally signed by                    CIVIL APPELLATE JURISDICTION
ARJUN
MACHHINDRA
KADAM                                    WRIT PETITION NO. 11359 OF 2026
Date: 2026.08.31
17:20:21 +0530

                      M/s. SVS Aqua Technologies LLP                       … Petitioner
                               Versus
                      Superintendent, Range IV, Division I (Shivajinagar), ... Respondents
                      CGST Pune II Commissionerate & Ors.
                                         __________________________
                      Mr. Sanket S. Bora a/w. Mr. Abhay H. Bore, Ms. Vidhi Punmiya, Adv.
                      Amiya R. Das and Adv. Tejal P. Kharkar i/b SPCm Legal for the
                      Petitioner.
                      Mr. Ram Ochani a/w. Ms. Sangeeta Yadav for the Respondents.
                                         __________________________

                                                      CORAM       : M. S. KARNIK AND
                                                                    SANDESH D. PATIL, JJ.
                                                      DATED       : 31st AUGUST, 2026.
                      P.C. :

                      1.       Heard learned counsel for the petitioner.

                      2.       It is the submission of learned counsel that an audit was

                      conducted under Section 65 of the Central Goods and Services Tax

                      Act, 2017 (‘CGST Act’ for short). Based on the audit, without there

                      being any adjudication proceeding either under Section 73 or Section

                      74 of the CGST Act, the authority has directly proceeded to effect the

                      recovery.     This according to learned counsel for the petitioner is

                      impermissible.

                      3.       Mr. Ochani, learned counsel appears and fairly submits that in


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all    probabilities     the   impugned   communication      is    just     an

administrative action and the same shall obviously culminate into a

show cause notice for adjudication.        If that is so, nothing would

survive for consideration in the petition.

4.      We find substance in the submission of Mr. Ochani as the notice

is clearly under Rule 101 (5) of the Central Goods and Services Tax

Rules, 2017. Rule 101 (5) reads thus:-

        Rule 101 (5).-     On conclusion of the audit, the proper officer
        shall inform the findings of audit to the registered person in
        accordance with the provisions of sub-section (6) of section 65 in
        FORM GST ADT-02.


5.      We thus find that on conclusion of audit, the proper officer has

informed the findings of audit to the registered person in accordance

with the provisions of sub-section 6 of Section 65 in Form GST ADT-

02. The apprehension of the petitioner that the recovery will be

effected on the basis of such information is misconceived.                It is

obvious that the GST Department shall take further action in

accordance with the provisions of the CGST Act.

6.      In such view of the matter, the petition is disposed of.



     (SANDESH D. PATIL, J.)                         (M. S. KARNIK, J.)

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