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2024 (1) TMI 7 - HC - Service TaxSeeking vacation of the interim stay - proceedings proposed to be initiated in terms of Rule 5A(2) of the Service Tax Rules, 1994 - HELD THAT - The present batch of matters placed before the Hon ble Chief Justice, for constituting an appropriate Bench in order to consider the following questions which appear to arise A. Whether Aargus which upholds the validity of Rule 5 A(2) was correctly decided? B. Whether the views expressed in Travelite and Megacabs require reconsideration in light of the above? Interim orders granted earlier to continue till the next date of hearing.
Issues involved: Validity of Rule 5A(2) of the Service Tax Rules, 1994 post amendments and conflicting decisions in Travelite, Mega Cabs, Aargus, and Viannar.
The judgment addressed a batch of matters concerning the expeditious hearing due to the application seeking vacation of an interim stay granted on 27.05.2019, which had placed proceedings under Rule 5A(2) of the Service Tax Rules, 1994 in abeyance. The Division Bench had previously struck down Rule 5A(2) in Travelite case, leading to an amendment in Section 94(2) of the Finance Act, 1994. The subsequent judgments in Mega Cabs upheld the invalidity of the amended Rule 5A(2), while Aargus and Viannar decisions upheld the validity of Rule 5A(2) based on the saving clause in the Central Goods and Services Tax Act, 2017 (CGST Act). This created a conflict between the decisions, necessitating a definitive opinion on the validity of Rule 5A(2) (para. 2-8). The conflicting decisions in Travelite, Mega Cabs, Aargus, and Viannar led to uncertainty regarding the validity of Rule 5A(2). Despite the stay orders by the Supreme Court, the declaration of invalidity by the High Court was not effaced, and the revival of the provision was not automatic. The Court decided to refer the matters to a larger Bench to address the questions of the validity of Rule 5A(2 as upheld in Aargus, and the need for reconsideration of views expressed in Travelite and Mega Cabs (para. 14-16).
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