Case Law Details

Case Name : Union of India & ORS. Vs M/S Travelite (India) (Supreme Court of India)
Appeal Number : Petition(s) for Special Leave to Appeal (C) No(s). 34872/2014
Date of Judgement/Order : 18/12/2014
Related Assessment Year :
CA Sumit Grover

In August,2014, Hon’ble High Court of Delhi in the matter of UNION OF INDIA & ORS. v. M/S TRAVELITE (INDIA) pronounced that the service tax audits conducted u/r 5A(2) of Service tax rules, 1994 are not valid in law.

Thereafter, department moved to SC against the impugned judgement. The matter was admitted by the court and on 18th Dec’14, Hon’ble Apex Court has granted a stay on the operation of the judgement made by High Court.
 It would be quite interesting to see the fate of service tax audits in the eyes of this case. And it might become a landmark judgement with respect to service tax audits conducted by department since inception.

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  1. KC Sivakumar says:

    As per the circular dated 10th Dec 2014, the Board has observed that vide notification 23/2014-ST dt,5-12-2014, the Central Government has inserted a new rule 5(A)(2) in the Service Tax Rules, 1994 and this rule provides for scrutiny of records by the audit party deputed by the Commissioner and such scrutiny essentially constitutes audit by the audit party consisting of departmental officers. It is further added that the expression “verified” used in Section 94(2)(k) of the FA, 1994 and would include audit by departmental officer. With this statutory backing now given, the Board has stated that the said judgment can now be distinguished as a clear statutory backing for the rule now exists in Section 94(2)(k) of the said Act.

  2. Rakesh Panjwani says:


    But I think govt issued one circular(circular No 181/7/2014 dated 10th Dec 2014, post which scenario has been changed and now govt has got the power to audit

    Rakesh Panjwani

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