The Delhi High Court has declined to interfere with the transfer of a taxpayer’s Goods and Services Tax (GST) audit file from the Audit Wing to the Anti-Evasion Wing, observing that such a transfer is essentially an administrative exercise and cannot, by itself, justify the exercise of writ jurisdiction in the absence of any statutory prohibition under the Central Goods and Services Tax Act, 2017.
The bench of Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar has observed that at the time of transferring the file, the Additional Commissioner of the Audit Wing had recorded that the taxpayer had submitted only a few documents through email despite repeated notices.
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The petitioner questioned the authority of the Additional Commissioner of the Audit Wing to transfer the audit file to the Anti-Evasion Wing. It was argued that no power had been conferred upon the Additional Commissioner under the CGST Act to make such a transfer.
The petitioner also relied upon the time limit prescribed for completing an audit under Section 65 of the CGST Act. Under the provision, an audit is ordinarily required to be completed within three months from the date of its commencement. The Commissioner may extend this period by a further six months after recording reasons for the extension.
According to the petitioner, however, the audit proceedings in its case had continued for nearly two years. On that basis, the petitioner sought to challenge both the prolonged audit proceedings and the subsequent transfer of the file to the Anti-Evasion Wing.
Opposing the petition, the GST authorities submitted that the Additional Commissioner of the Audit Wing and the Additional Commissioner of the Anti-Evasion Wing were functioning under the same Commissionerate. Therefore, the movement of the file from one wing to another was an internal administrative measure.
The respondents further alleged that the petitioner had not cooperated with the Audit Wing and had failed to provide the documents sought during the audit proceedings. It was on account of the alleged non-cooperation that the case was transferred to the Anti-Evasion Wing.
The Court further recorded that the financial documents relating to the petitioner’s Delhi branch had not been furnished to the authorities.
Against this factual background, the Bench held that the transfer of a GST file from one departmental wing to another is essentially an administrative exercise. The Court found that the CGST Act does not contain any provision prohibiting such a transfer.
“In the absence of any statutory prohibition under the CGST Act against such transfer, the same cannot, by itself, be a ground for interference in exercise of writ jurisdiction,” the Court observed.
The High Court consequently refused to interfere with the departmental decision to transfer the audit file to the Anti-Evasion Wing.
However, the Court preserved the petitioner’s right to raise all legally available objections before the adjudicating authority. It specifically clarified that the petitioner could raise its objection concerning the period within which the GST audit was required to be completed.
Thus, while the Court did not set aside the transfer of the file, it left the issue concerning the alleged breach of the statutory audit timeline open for consideration by the competent adjudicating authority.
With these observations, the High Court disposed of the writ petition along with the pending application.
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