ST - Access to a registered premises and Audit of records - Interim stay granted till November 30, 2018: High Court
By TIOL News Service
KOLKATA, SEPT 01, 2018: THE petitioner seeks a declaration that sub-rule (2) of Rule 5A of the Service Tax Rules, 1994 as substituted by notification no. 23/2014-ST dated December 05, 2014 is arbitrary and in conflict with provisions of Section 72A of the Finance Act, 1994.
The petitioner also seeks a declaration that the provisions of clause (k) of subsection (2) of Section 94 of the Finance Act, 1994 is unguided and gives uncontrolled power of delegation.
The third prayer is with regard to a notice dated February 16, 2015.
It is further submitted that the issue of vires of similar provisions of the Finance Act, 1994 initially came up for consideration before the Delhi High Court in Travelite (India) - 2014-TIOL-1304-HC-DEL-ST and when such provisions were held to be ultra vires . Furthermore, an appeal is pending against such judgment and order of the Delhi High Court before the Hon'ble Supreme Court of India. [This order has been stayed by the Supreme Court. See 2014-TIOL-101-SC-ST-LB - Editor]
The petitioner also informs that subsequently the provisions as impugned in the present writ petition were introduced and which too were struck down by the Delhi High Court in Mega Cabs Pvt. Ltd. = 2016-TIOL-1061-HC-DEL-ST. [This order has also been stayed by the Supreme Court. See 2016-TIOL-162-SC-ST - Editor ]
Inasmuch as since the provisions have been struck down, the notice impugned herein issued on such basis needs to be quashed also, the petitioner contended.
The Additional Solicitor General appearing for the respondent UOI sought a direction for filling affidavits.
The High Court observed -
“4. Since sub-rule 2 of Rule 5A of the Service Tax Rules, 1994, as substituted by notification dated December 25, 2014 was declared ultra vires by Mega Cabs Pvt. Ltd. (supra), it would be appropriate to grant interim stay of the proceedings. Such stay will continue till November 30, 2018 or until further orders whichever is earlier.”
The High Court also allowed the Revenue to file an affidavit-in-opposition within four weeks.
The Writ petition is listed "For Hearing" in the monthly list of November 2018.
In passing: All stayed…please see…
1. Should AG's Audit be allowed to visit factories and Premises of Service Tax Assessees? - (DDT 1298)
2. AG's Audit Visit to Factories and Premises of Assessees? - (DDT 1776)
3. CAG not authorised to visit factory of assessee in private sector
4. No Audit of Private Enterprises by AG's Audit - Calcutta High Court - (DDT 1951)
5. Karnataka High Court grants Interim Stay against CAG Audit of Service Tax Assessee - (DDT 2103)
6. Audit under Service Tax only by Chartered Accountants - not by officers of Department - High Court - (DDT 2283)
7. Even if Service Tax Audit cannot be done, there is no hurdle for Central Excise Audit - CBEC - (DDT 2453)
8. Service Tax - Audit by CAs - Solution worse than Problem - (DDT 2491)
9. Service Tax Audit - Cart Before Horse - (DDT 2494)
10. Service Tax Audit - Again in Delhi High Court - Notice Issued to UOI (DDT 2606)
11. Will Department close down its Audit wing? No more Audit by Departmental Officers or CAG (DDT 2861)
12. Service Tax Audit by Department - What is Department's Stand After Mega Cabs Judgement? (DDT 2896)
13. Good News for CBEC in Supreme Court - Mega Cabs and MakeMytrip Stayed (DDT 2939)
What Under GST:
The CGST Law has a Chapter XIII containing sections 65 & 66 devoted exclusively to Audit & Special Audit respectively, by tax authorities, and also has the word "Audit" defined in section 2(13) thus -
(13) "audit" means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder;
Thankfully, due to the fact that the definition of "audit" is an exclusive one and has covered within its ambit "verification", an issue of the kind seen in the Mega Cabs case (supra) may probably not come to the fore.
(See 2018-TIOL-1789-HC-KOL-ST)
