The Karnataka High Court has stayed further proceedings pursuant to multiple show cause notices issued against Aditya Birla Fashion and Retail Limited, observing that the challenge raises important jurisdictional questions regarding repeated audits and the validity of fresh proceedings after completion of an earlier audit.

The bench of Justice B.M. Shyam Prasad passed the interim order while tagging the matter with three other connected writ petitions involving identical legal issues arising from GST audit proceedings covering the financial years 2017-18 to 2022-23.

The petitions challenge show cause notices issued following audit proceedings initiated through Form GST ADT-01. According to the Court, the controversy is common across all the connected petitions, as the impugned notices pertain to multiple financial years and are based on grouped audit observations.

Considering the similarity of issues, the High Court ordered that all the writ petitions be heard together.

Senior Advocate G. Shivadass, appearing for the petitioner, advanced several legal grounds while seeking interim protection.

The principal challenge relates to the issuance of a single consolidated show cause notice covering several financial years. The petitioner argued that such consolidated notices are legally impermissible. Although this issue has previously been decided against taxpayers by a Division Bench of the Karnataka High Court, the matter is presently pending before the Supreme Court.

The petitioner further submitted that an audit covering the financial years 2017-18 and 2018-19 had already culminated in a final audit report dated 29 May 2021, with the proceedings concluding during 2022.

Subsequently, another audit notice in Form GST ADT-01 was issued covering the financial years 2017-18 to 2021-22. In response, the company furnished all books of account and records relevant to each assessment year before the GST authorities.

One of the principal arguments advanced before the Court was that once the statutory period contemplated under Section 65(4) of the Central Goods and Services Tax Act, 2017 had expired, the audit must be deemed to have been completed.

Despite this, the department issued another audit notice on 19 January 2024 covering the same tax period. When informed about the earlier audit proceedings, the authorities reportedly continued with the subsequent proceedings while stating that the earlier audit notice stood withdrawn.

The petitioner contended that the GST authorities lacked jurisdiction to effectively reopen completed audit proceedings by subsequently withdrawing the earlier audit and initiating fresh action after expiry of the statutory timeline. Consequently, it was argued that the impugned show cause notices themselves were without jurisdiction.

The petitioner also emphasized that the impugned show cause notices did not contain allegations of fraud, suppression of facts, or wilful default, strengthening the argument that the department could not invoke extended proceedings in the manner adopted.

After considering the submissions, Justice B.M. Shyam Prasad granted an interim stay on all further proceedings arising out of the impugned notices and orders.

The Court directed that the interim protection shall continue until further orders, while granting liberty to the GST authorities to complete their pleadings and seek either vacation of the stay or early disposal of the writ petitions.

The Karnataka High Court has directed that all the connected writ petitions be listed together for further hearing on 12 August 2026.

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