Validity of  Rule 5 A of Service Tax Rules is on challenge before Larger Bench: Delhi HC Directs to Continue Proceedings until Final Order [Read Order]

The Delhi High Court directed to Continue Proceedings until the final order on the validity of  Rule 5 A of Service Tax Rules, 1994. It was submitted that the validity was challenged before the larger bench of the court.

M/S Hardicon Ltd, the Petitioner sought the quashing of the letter whereby a service tax audit was initiated against the Petitioner for the period 2012-2013 to 2017-2018.  Petitioner further seeks quashing of Show Cause Notice dated 24.10.2018, which was issued under the audit.  

Senior counsel for the petitioner submitted that the subject proceedings have been initiated in terms of Rule 5A of the Service Tax Rules, 1994.  He submitted that the validity of the said Rule is under challenge and a reference before a larger Bench is pending titled KTC (India) Pvt. Ltd. Vs. Commissioner of Central GST Audit-II, Delhi and other batches of matters.    

The notice issued was accepted by counsel for respondents, who submitted that the petitioner had participated in the audit proceedings and the Show Cause Notice has been issued under audit carried out. 

A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja directed that the proceedings on the Show Cause Notice may continue and held that the final order, if any, passed before the next date of hearing shall not be given effect to without the leave of the Court.  

To Read the full text of the Order CLICK HERE

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