Karnataka
Co-operative Societies Act, 1959 : Karnataka High Court rejected writ petition
filed by 'Karnataka State Chartered Accountants Association' challenging the
amendment to the Karnataka Co-operative Societies Act, 1959 (KCS) which allowed
auditing of accounts by Cost Accountant or Cost Accountants Firm saying it to
be statutorily governed and denied to interfere with same.
• Amendment to the definition of Auditor under
the Karnataka Co-operative Societies Act, 1959 to include a Cost accountant,
within the meaning of Cost and Works Accountants Act, 1959 couldn't be said to
null and void and ultra-vires the Constitution of India and
Central Legislatures as it did not result in encroachment on the profession of
Chartered Accountants.
Facts:
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(a)
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Karnataka State
Chartered Accountants Association filed writ petition challenging amendment
to the Karnataka Co-operative Societies Act, 1959 (KCS) which allowed
auditing of accounts by Cost Accountant or Cost Accountants Firm.
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(b)
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The Chartered
Accountants association alleged that Government succumbed to the
"pressure of lobbying and political pressure," by the cost
accountants' fraternity and when the law was amended, the definition of
'auditor' was enlarged to include cost accountants. Otherwise, only Chartered
Accountants or a CA firm could audit accounts thereby encroaching on
profession of CAs
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(c)
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The Govt. contended
that in co-operative sector in Karnataka included spinning mills, sugar
factories and industrial societies which required costing work to be done by
cost accountants. It also said that the syllabus studied by the two
professions were very similar and there was a shortage of professionals, and
it was found to be a dire need to bring cost accountant firms within the
meaning of 'auditor and auditing firms'.
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