Updated on: Wednesday, May 29, 2019, 06:33 AM IST

Calcutta High Court freezes service tax audit post-GST


Mumbai : In a major relief to the petitioners, Infinity Bnke and Infinity Infotech, the Calcutta High Court has granted stay against audit notices issued by Central Tax officers for conducting audit of the last five years under service tax, after the introduction of GST.

Before the High Court, the petitioners pleaded 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.

With regard to the issue of the vires of similar provisions of the Finance Act, the petitioners relied on the decision of the Delhi High Court in Travelite (India) Vs. Union of India wherein the court held that the provisions are ultra vires.


“Since the provisions have been struck down, the notice impugned herein issued on such basis needs to be quashed also,” the petitioners argued. While granting the order, Justice Debangsu Basak said that “Since sub-rule 2 of Rule 5A of the Service Tax Rules, 1994, as substituted by notification dated Dec 25, 2014 was declared ultra vires by Mega Cabs (supra), it would be appropriate to grant interim stay of the proceedings. Such stay will continue till November 30 or until further orders whichever is earlier.” Advocates JK Mittal, Paritosh Sinha, Amitava Mitra and P. Chaturvedi appeared for the petitioners.

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Published on: Monday, September 03, 2018, 12:36 AM IST