Tax investigation coercion and harassment must not be used for recovery, while the inquiry may continue in accordance with law.

Interim protection was granted against coercive recovery of alleged service tax dues and against harassment in the investigation, but the inquiry itself was not stayed. The Court held that summons and recovery measures in tax investigations must be pursued only in accordance with law and cannot be used as instruments of coercion or oppressive examination of directors and senior officers. The substantive constitutional challenge to the levy on hire-purchase and lease financing was left open for decision on affidavits.

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Issues: Whether coercive steps for recovery of alleged service tax dues and harassing investigation methods should be restrained at the interim stage.

Analysis: The challenge to legislative competence to levy service tax on hire-purchase and lease financing was not finally decided and was left for consideration on affidavits. On the complaint of coercive recovery and prolonged examination of officers, the Court declined to stall the investigation altogether, but accepted that the investigation should not be used to harass the petitioner-company's directors and senior officers. The notice governing summons under Section 14 of the Central Excises and Salt Act, 1944 was treated as requiring adherence, and the respondent was permitted to proceed only in accordance with law without coercing payment.

Conclusion: Interim relief was granted against coercive recovery and undue harassment, while the investigation itself was not stayed.

Final Conclusion: The writ petition remained pending on the substantive constitutional challenge, but the petitioner obtained limited protection against coercive collection and oppressive investigation.

Ratio Decidendi: Summons and recovery measures in tax investigations must not be used as instruments of coercion or harassment, and any demand must be pursued only in accordance with law.

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