9911796707
TMI Blog2018 (10) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... warehouse service centers and provides support services in Special Economic Zones. 2. The petitioner has challenged the communication issued by the Comptroller and Auditor General of India ("the CAG", for short) calling upon the petitioner to submit Service Tax audit at the hands of the officers of the CAG. 3. In this context, the petitioner would draw our attention to the final communication dated 09.10.2018 issued by the CAG rejecting the petitioner's objection to initiation of such audit. The respondents seem to be relying heavily on Rule 5A of the Service Tax Rules, 1994 for exercising such powers of audit. Such Rule 5A, as it stood earlier, was challenged before the Delhi High Court and was struck down, as being unconstitutional, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been stayed. The stay granted by the High Court, however, does not appear to have been disturbed. 5. 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. 6. Quite apart from these legal controversies, counsel for the petitioner raised an additional contention that with the introduction of the Goods and Service T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed;" 8. A perusal of the said clause of Subsection (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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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