Jharkhand HC stays Service Tax proceedings initiated post GST introduction

M/s. Sulabh International Social Service Organization Vs Union of India (Jharkhand High Court)

Division Bench of Jharkhand High Court igranted stay (status quo) to the proceedings initiated under Service Tax after introduction of GST by issuing notice, summons and visit of officers after taking into account one of the main contention that Service Tax Rules have not been saved. Respondents quoted judgement from Kerala High Court in Laxi Narayan Sahu and Calcutta High Court in Gitanjali Vacatuonville Pvt. Ltd., Hon’ble Court despite that granted the interim relief.

At the interim stage, we have to examine if any fresh proceeding under the 1994 Act for scrutiny, inspection or audit, if commenced after omission of the said Act is prima-facie legally valid or not. Though Mr. Mittal has submitted that the action complained against in this writ petition has been undertaken in pursuance of the power under Rule 5A of the 1994 Rules, as we have already observed, the legality of the instruments challenged in this writ petition do not specify the provisions under which such actions have been taken by the revenue authorities. The saving clause itself after omission of the statute does not refer to any particular provision of the Rules. Sub-clause (e) which we have quoted in the preceding part of this order gives a list of actions which are saved.