CAG have no jurisdiction to audit the accounts of a non-government entity

Last updated: 22 March 2021

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Quick Summary

The Bombay High Court has ruled that the Comptroller and Auditor General (CAG) does not have the authority to audit the accounts of private, non-government entities. This decision stemmed from a case where the Central Excise Revenue Audit (CERA) attempted to audit Kiran Gems Private Limited. The court found that such audits are only permissible if requested by specific government authorities, such as the President or Governor, and cannot be unilaterally initiated by the CAG for private companies.

Court :
Bombay High Court

Brief :
The Hon'ble Bombay High Court in Kiran Gems Private Limited v. Union of India and Ors. [Writ Petition No. 1135 of 2019, decided onJanuary 29, 2021] quashed the notice/intimation demanding audit of a private entity by Central Excise Revenue Audit ('CERA') and requiring information/records for the period 2015-16 to 2017-18 to the officers of CERA for audit. Held that, Comptroller or Auditor General ('CAG') cannot have jurisdiction to audit the accounts of a non-government entity unless requested by President of India or Governor of the State or Administrator of the Union Territory as prescribed.

Citation :
Writ Petition No. 1135 of 2019, decided on January 29, 2021

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