Supreme Court stays Delhi HC judgment on Service Tax Audit by Departmental Officer or CAG in Mega Cabs Private Limited case

Supreme Court stays Delhi HC judgment on Service Tax Audit by Departmental Officer or CAG

The Supreme Court has stayed the judgment/decision of the Delhi High Court in the case of Mega Cabs Private Limited. In the said judgment, the Delhi High Court had declared ultra vires and struck down that Rule 5A(2) and Service Tax Notification No. 23/2014 to the extent it authorised service tax audit by departmental officers or audit party deputed by the CAG. In the said judgment, the Delhi HC had also struck down Circular No. 181/7/2014-ST and Circular No. 995/2/2015-CX 

A Division Bench consisting of Justice Madan B. Lokur and Justice D. Y. Chandrachud after hearing the SLP No. 26675/2016 granted stay on the operation of the judgment of the Delhi High Court.

Not long ago, in 2014, a Full Bench of the Supreme Court headed by Chief Justice had granted Granted Stay on Delhi High Court Judgment in Travelite India case ruling that provisions of Rule 5A(2) related to Service Tax Audit are Ultra Vires. The Delhi High Court in the case of M/s Travelite (India) had opined that the said rule amounted to an attempt to include provision for such a general audit through the back-door and accordingly struck down Rule 5A(2) as ultra-vires the rule making power conferred under Section 94(1) of the Finance Act.

Next Listing of the cases as fixed by the Supreme Court:

M/s Mega Cabs Private Limited – There are no further orders of listing 
M/s Travelite (India)                   – There are no further orders of listing 

Download Supreme Court Stay Order in M/s Mega Cabs case Click Here >>