VIANAAR HOMES PRIVATE LIMITED Vs. ASSISTANT COMMISSIONER (CIRCLE-12), CENTRAL GOODS & SERVICES TAX, AUDIT-II, DELHI

JUDGEMENT

(1.) By way of the present petition, a challenge is laid to the jurisdiction, authority and legality of the action of the Respondents initiated in terms of Rule 5A of the Service Tax Rules, 1994, read with Section 174(2)(e) of the Central Goods and Services Tax Act, 2017 [hereinafter referred to as the "CGST Act"], for conducting audit/verification of documents and records at the business premises of the Petitioner for the period of F.Y. 2014-15 to 2016-17 (up to June 2017) or for the period since last audited [hereinafter referred to as "the disputed period"]. Brief facts:

(2.) As averred in the petition, the facts of the case in brief are that the Petitioner is a company engaged in the business of construction of residential complexes since its incorporation on 25.05.2013. The Petitioner claims to be a regular and timely taxpayer under both the Service Tax and GST regime. It has never been subjected to any general or special audit by either the Service Tax or the GST authorities. Petitioner's books of accounts and business are subjected to, among other things, statutory audit in terms of the Companies Act, 2013 and the Income Tax Act, 1961. On 21.01.2020, officers of Central Goods and Service Tax, Audit-II visited the business premises of the Petitioner, directed the production of certain documents and sought information in relation to the disputed period. In addition thereto, the officers also demanded information pertaining to several group companies of the Petitioner. Despite Petitioner's compliance with the above and submission of the requisite information, the officers visited the business premises again on 17.02.2020 as well as 24.02.2020. Their conduct exhibits the intention to continue with the visits, conduct audit/verification proceedings, and give further directions for production of documents and information.

(3.) Aggrieved with the aforesaid action, the Petitioner has challenged, interalia the letter dated 01.11.2019 by virtue whereof the Respondents have commenced the audit/verification, on the ground that the same is void ab initio, being wholly without jurisdiction as well as without any statutory or legal authority. The primary hypothesis for assailing the action of the Respondents is founded on the premise that w.e.f. 01.07.2017, by the advent of the CGST Act, the Respondents cannot take recourse to a subordinate legislation (i.e. Rule 5A Service Tax Rules, 1994) framed under Chapter V on the Finance Act, 1994, which, by virtue of Section 173 of CGST Act, stands omitted. According to the Petitioner, the repeal and saving provision viz. Section 174 does not specifically save Rule 5A of the Service Tax Rules, 1994. Without prejudice to the afore-noted contention, it is contended that the saving provision and Section 6 of the General Clauses Act, 1897 saves only those cases where the obligation / liability stood incurred or accrued prior to the date of repeal. The duty, tax etc. that is within contemplation of the saving clause is only that which falls within the ambit of section 72 & 73 of the Finance Act, 1994. Section 5A proceedings are in the nature of a roving enquiry that would not result in tax becoming due, and therefore cannot be resorted to in the facts of the present case. Contentions of the parties: