The Madras High Court has issued an interim stay on a Central GST audit for ArcelorMittal Nippon Steel India Pvt. Ltd., following the conclusion of a State audit for the same financial years, 2018–19 to 2022–23. The case arose when the petitioner received a GST Audit Notice from Central Tax authorities, despite the same period having already been audited by State Tax authorities, resulting in the dropping of proceedings except for a minor penalty.
The petitioner argued that according to a Supreme Court judgment interpreting Section 6(2)(b) of the CGST Act, once one tax authority has initiated proceedings on a particular matter, parallel proceedings by another authority are prohibited. Despite this, the Central authorities proceeded with a new audit, prompting the petitioner to seek legal recourse.
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The Court recognized a prima facie case of legal violation under Section 6(2)(b), as the State audit had already been concluded. As a result, the initiation of a central audit for the same period was deemed legally impermissible. Consequently, the Court granted an interim stay on the Central GST Audit Notice issued on April 7, 2025. The State Tax Officer who conducted the previous audit has been added as a party to the case, which is scheduled for further hearing on September 23, 2025.
Order date: 02 Sept 2025
Parties: ArcelorMittal Nippon Steel India Pvt. Ltd. v. Assistant Commissioner & Ors.
Facts -
- Petitioner was issued a GST Audit Notice (Form ADT-01 dated 07.04.2025) by Central Tax for FYs 2018–19 to 2022–23.
- Petitioner argued that State Tax Authorities had already audited the same period, dropping proceedings except for a small penalty.
- Reliance placed on SC judgment (SLP(C) 6092/2025, 14.08.2025) interpreting Section 6(2)(b) CGST Act: once one authority initiates proceedings on a subject matter, parallel action by another is barred.
- Despite informing authorities, a fresh central audit was initiated.
Issue -
- Whether Central authorities can initiate a GST audit under Section 65 when the same subject matter has already been audited and concluded by State authorities?
Order -
- The Court held that petitioner made out a prima facie case showing violation of Section 6(2)(b).
- Since State audit proceedings had already been concluded, initiation of central audit for the same period appeared legally impermissible.
- Interim stay granted on the Central GST Audit Notice dated 07.04.2025. State Tax Officer who conducted earlier audit was impleaded as party. Case adjourned for further hearing on 23.09.2025.
