Validity of revived service tax audit rule referred to larger Bench amid conflicting precedents and continuing interim protection

Validity of Rule 5A(2) of the Service Tax Rules, 1994, as revived after insertion of Section 94(2)(k) of the Finance Act, 1994, remained in issue, along with whether the earlier views in Travelite and Mega Cabs required reconsideration in light of Aargus and Vianaar. The matters were referred to the Hon'ble Chief Justice for constitution of an appropriate larger Bench to determine the issue authoritatively, and the interim orders were directed to continue until the next date of hearing.

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Issues: Whether Rule 5A(2) of the Service Tax Rules, 1994, as revived after insertion of Section 94(2)(k) of the Finance Act, 1994, is valid; whether the earlier views in Travelite and Mega Cabs require reconsideration in light of Aargus and Vianaar; and whether the matter should be placed before a larger Bench for authoritative determination.

Outcome: The batch of matters was referred to the Hon'ble Chief Justice for constitution of an appropriate larger Bench, and the interim orders were directed to continue till the next date of hearing.

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