Page 109 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] SURYA ENTERPRISES v. COMMISSIONER OF C. EX. & S.T., CHENNAI-III 323
(iii) requiring production of accounts, documents or other evi-
dence under the Chapter or the rules made thereunder; or
(b) an audit has been initiated, and such inquiry, investigation or audit
is pending as on the 1st day of March, 2013, then, the designated au-
thority shall, by an order, and for reasons to be recorded in writing,
reject such declaration.
6. The contention of the department is that an audit was initiated
against the appellant and, therefore, the VCES application cannot be entertained.
It is stated that on 26-11-2012, they had visited the premises of the appellant. This
fact is denied by the appellant. As per the Board’s clarification, what constitutes
the ‘initiation of audit’ is clarified as under :-

S. Issues Clarification
No.
19 In terms of Section Initiation of audit : For the purposes of
106(2)(b), if a declaration VCES, the date of the visit of auditors to
made by a person against the Unit of the taxpayer would be taken as
whom an audit has been the date of initiation of audit. A register is
initiated and where such audit maintained of all visits for audit purposes.
is pending, then the desig-
nated authority shall by an
order and for reasons to be Culmination of audit : The audit pro-
recorded in writing, reject cess may culminate in any of the fol-
such declaration. As the lowing manner :-
audit process may involve (i) Closure of audit file if no dis-
several stages, it may be crepancy is found in audit;
indicated as to what event (ii) Closure of audit para by the
would constitute.- Monitoring Committee Meeting
(MCM);
(i) Initiation of audit; and (iii) Approval of audit para by MCM
and payment of amount in-
volved therein by the party in
(ii) Culmination of audit. terms of the provisions of the
Finance Act, 1994;
(iv) Approval of audit para by
MCM, and issuance of SCN, if
party does not agree to the para
so raised.
The audit culminates at a point when
the audit paras raised are settled in
any manner as stated above.
The pendency of audit as on 1-3-2013
means an audit that has been initiated
before 1-3-2013 but has not culminat-
ed as on 1-3-2013.

GST LAW TIMES  18th June 2020  109