Case Law Details
OWS Warehouse Services LLP Vs. Union of India (Gujarat High Court)
Hon’ble Gujarat High Court granted stay on conducting audit of records of taxpayers under 5A of Service Tax Rules, 1994, by Officers of C&AG who were sending communications through CGST officers.
Counsel for the petitioner submitted that thereafter, Rule 5A of the Service Tax Rules, 1994 was amended. The amended Rule also came to be challenged before the Delhi High Court in case of Mega Cabs Pvt. Ltd.-v. Union of India. The Delhi High Court again struck down the Rule in judgment reported in 2016 (43) S.T.R. 67 (Del.). Counsel candidly stated that the Supreme Court has stayed the judgment of the Delhi High Court in case of Mega Cabs Pvt. Ltd. by an order dated 26.09.2016.
Hon’ble High Court held that Sub-section (2) of Section 174 and other clauses would, prima facie, show that there was no saving of Rule 5A in such manner that fresh proceedings for audit could be initiated in exercise of powers under the said Rule. We, therefore, have serious doubts whether, with the aid of Rule 5A of the Service Tax Rules, 1994, the CAG can carry out compulsory Service Tax audit of private agencies like the petitioner.
Hon’ble High Court further held that Under the circumstances, issue Notice, returnable on 28.11.2018. By way of ad-interim relief, the impugned order dated 09.10.2018 is stayed. In other words, the CAG shall not carry out any further Service Tax audit of the petitioner. Direct service permitted.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
WOULD IT MEAN THAT AUDIT INITIATED BY COMMISSIONER ALSO STRUCK DOWN BY THIS JUDGEMENT ?