The Delhi High Court held that the Service Tax Authority was empowered to initiate fresh proceedings despite the coming into force of the GST Act, however, directed to hold final orders till the disposal of the Writ Petition.
The petitioner, Tuli Motors received the show cause notices in the year 2021 which were related to the old assessments for the period 2015 to 2017. It filed a writ petition and submitted that the old assessments for the period 2015 to 2017 cannot be reopened in the year 2021 and emphasized that after the repeal of Chapter V of the Finance Act, 1994 by the Goods and Services Tax Act, 2017, there is no power to initiate any fresh proceeding under the repealed Act i.e. Chapter V of the Finance Act, 1994.
Mr. Sudipto Sarkar, the counsel on behalf of the petitioner submitted that the old assessment for the period 2015 to 2017 cannot be reopened in the year 2021. He emphasizes that after the repeal of Chapter V of the Finance Act, 1994 by the Goods and Services Tax Act, 2017, there is no power to initiate any fresh proceeding under the repealed Act i.e. Chapter V of the Finance Act, 1994.
Mr. Harpreet Singh, on behalf of the Department, contended that Delhi High Court in Vianaar Homes Private Limited Vs. Assistant Commissioner (Circle-12), Central Goods & Services Tax, Audit-II, Delhi & Ors. has held that there is the power to initiate fresh proceedings under Chapter V of the Finance Act, 1994 despite coming into force of the Goods and Services Tax Act, 2017.
The division bench of Justice Manmohan and Justice Naveen Chawla directed that proceedings pursuant to the impugned Show Cause Notices and summons shall continue but the final orders shall not be given effect to till disposal of the writ petition.
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