Intertek INDIA PVT. LTD. vs. Central Board Of Indirect Taxes And Customs(CBIC) & Anr.
Held
The Court held that the petition had no merit. The reliance placed by the petitioner on the decision in Mega Cabs (P) Ltd. vs. Union of India was misplaced for two reasons. Firstly, the said decision had been stayed by the Supreme Court. Secondly, the Division Bench in Mega Cabs had only declared Rule 5A(2) as amended, to the extent it authorized officers of the Service Tax Department, the audit party deputed by a Commissioner, or the CAG to seek production of documents on demand, as ultra vires the Finance Act. It did not interfere with the power of the authorities to conduct investigations and inquiries under Sub-Rule (1) of Rule 5A or other relevant provisions. The Court found it incomprehensible that a breach or violation of service tax laws, such as non-reversal of CENVAT credit, should go uninvestigated. Therefore, the summons was validly issued in furtherance of the power to inquire and investigate.
Facts
The petitioner, Intertek India Pvt. Ltd., filed a writ petition challenging a summons dated September 23, 2019, issued by respondent No. 2. The summons indicated an inquiry under Section 14 of the Central Excise Act, 1944, Section 83 of the Finance Act, 1944, and Section 70 of the CGST Act, 2017, read with Rule 132 of the CGST Rules, 2017. The petitioner argued that the summons was based on Rule 5A of the Service Tax Rules, 1994, which had been struck down by this Court in Mega Cabs (P) Ltd. vs. Union of India. The respondents contended that the summons was issued in furtherance of an inquiry into short payment of service tax/reversal of CENVAT credit, and Section 174(2)(e) of the CGST Act, 2017, preserved such proceedings. They also clarified that only a part of Rule 5A(2) was struck down, not the power to conduct investigations.
Key Issues
1. Whether the summons dated 23.09.2019, issued under Section 14 of the Central Excise Act, 1944, Section 83 of the Finance Act, 1944, and Section 70 of the CGST Act, 2017, read with Rule 132 of the CGST Rules, 2017, is liable to be quashed on the ground that it is based on Rule 5A of the Service Tax Rules, 1994, which was struck down by this Court in Mega Cabs (P) Ltd. vs. Union of India. Petitioner's contention: The summons is invalid as it relies on Rule 5A of the Service Tax Rules, 1994, which has been declared ultra vires by this Court. The petitioner relies on the decision in Mega Cabs (P) Ltd. vs. Union of India. Revenue's contention: The summons is valid. The decision in Mega Cabs (P) Ltd. has been stayed by the Supreme Court. Furthermore, only a specific part of Rule 5A(2) was struck down, which pertained to audit by CAG and officers of the Service Tax Department. The power to conduct investigations and inquiries under other provisions, including Section 70 of the CGST Act, 2017, remains unaffected. Section 174(2)(e) of the CGST Act, 2017, saves existing inquiries and investigations in respect of pre-GST laws.
Sections Cited
Section 14, Central Excise Act, 1944, Section 83, Finance Act, 1944, Section 70, CGST Act, 2017, Rule 132, CGST Rules, 2017, Rule 5A, Service Tax Rules, 1994, Section 174(2)(e), CGST Act, 2017
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 18.12.2019
The petitioner has preferred the present writ petition to assail the summons dated 23.09.2019 issued by respondent No. 2 at the petitioner’s Gurugram Office situated at Plot No. 290, Udyog Vihar, Phase-2, Gurugram, Haryana. The said summons, in its opening, inter alia, states: “Whereas a case against/about M/s Intertek India Pvt. Ltd. under Section(s) 14 of the Central Excise Act, 1944, Section 83 of the Finance Act, 1944 and Section 70 of CGST Act 2017 read with Rule 132 of CGST Rules,2017 is being enquired by me/under my orders.”
From the above, it would be seen that the summons relate to conduct of an inquiry by respondent No.
The petitioner has also placed on record – though not assailed, the commun
The judgment continues below.
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