Service tax audit under Rule 5A stayed pending review of saving provisions and fresh proceedings challenge.

Fresh service tax audit proceedings under Rule 5A were challenged on the basis that the saving provisions, including section 174(2)(e), did not appear to preserve that rule for initiating new audits against private entities. The petition relied on an earlier prima facie view on the same question and stated that the present facts were similar. Pending further consideration, the Court granted ad-interim protection and stayed proceedings under the letter dated 12.07.2018 while issuing notice.

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Issues: Whether, in the light of the saving provisions, fresh proceedings for service tax audit could be initiated under Rule 5A of the Service Tax Rules, 1994, and whether interim protection was warranted pending consideration of the petition.

Analysis: The petition referred to an earlier prima facie view that clause (e) of sub-section (2) of Section 174 and the other saving clauses did not appear to preserve Rule 5A in a manner that would permit fresh audit proceedings against private agencies like the petitioner. The present matter was stated to involve similar facts.

Outcome: Notice was issued returnable on 24.01.2019, and further proceedings pursuant to the letter dated 12.07.2018 were stayed by way of ad-interim relief.

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