Saving clause under GST law does not clearly permit fresh service tax proceedings after omission, with status quo maintained.

Section 174(2)(e) of the CGST Act was read as preserving investigations, inquiries, verifications, adjudications and related proceedings concerning liabilities under the omitted service tax regime, but the term "instituted" was prima facie understood to cover proceedings already set in motion before omission, not to authorise fresh initiation after Chapter V of the Finance Act, 1994 ceased to operate. In view of the interim ambiguity and the approach taken by other High Courts in similar matters, the Court preserved the existing position and directed maintenance of status quo pending further hearing.

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Issues: Whether, after omission of Chapter V of the Finance Act, 1994, fresh proceedings for scrutiny, inspection or audit could prima facie be instituted under the saving clause in Section 174(2)(e) of the Central Goods and Services Tax Act, 2017.

Analysis: The saving provision in Section 174(2)(e) protects investigations, inquiries, verifications, adjudications and other legal proceedings in relation to liabilities arising under the omitted service tax regime. The controlling words are that such proceedings may be "instituted, continued or enforced". On a prima facie reading, the expression "instituted" was understood to refer to proceedings already set in motion before omission, and not to authorise a fresh initiation after omission of the earlier law. In view of the ambiguity at the interim stage, and following the approach adopted by other High Courts in similar matters, the Court considered it appropriate to preserve the existing position pending further hearing.

Conclusion: Prima facie, fresh proceedings initiated after omission of Chapter V of the Finance Act, 1994 were not treated as clearly saved by Section 174(2)(e), and status quo was directed to be maintained.

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