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2020 (3) TMI 811 - DELHI HIGH COURTPower of service tax department to Audit and seek information - Post GST era - Rule 5A of the Service Tax Rules, 1994 as having lapsed w.e.f. 01.07.2017 - Held that:- From Section 94 of the Finance Act, 1994 it would be seen that the Central Government has been empowered to make Rules for carrying out the provision of Chapter 5 of the Finance Act, 1994, which contains the provisions in relation to levy of service tax. Power of Central Government to frame Rules - Held that:- The specific aspects in respect of which the Rules may be framed as enumerated in clauses (a) to (m) of Section 94(2) do not take away the general and omnibus power to make Rules conferred by the opening words of Section 94 (2). The Parliament consciously while enumerating the specific matters in respect of which Rules may be framed, preserved the general Rule making power of the Central Government. The only statutory limitation placed on the said Rule making power is that the Rule(s) should be framed for the purpose of enforcing the service tax regime. Therefore, the power of the Central Government to frame rules for carrying out the provisions of the service tax regime was exhaustive, and there is absolutely nothing to suggest that the said power did not encompass the power to frame a Rule of the kind as Rule 5A, as framed w.e.f. 28.12.2007. Scope of Rule 5A - Held that:- The power vested in the Competent Authorities to recover service tax not levied or paid, or short levied or short paid, or erroneously refunded [under Section 73 of the Finance Act, 1994] would remain a dead letter, if the Competent Authority under the Act is not empowered in terms of the Rule 5A. The said Rule 5A is, even otherwise, relatable to Clause (k) of Section 94 (2), since the said Rule – while casting an obligation on the assessee to produce the records, he is obliged to maintain under the Finance Act, 1994, simultaneously empowers the Competent Authorities to ensure compliance of the said obligation. Thus, we reject the submission of learned senior counsel for the Petitioner that the Central Government lacked the authority and competence to frame Rule 5A. Post GST era - Held that:- there is nothing to show that the Parliament intended to grant blanket immunity to all assessees whose past acts and omissions may, otherwise, fall foul of the provisions of, inter alia, Chapter V of Finance Act, 1994. On the contrary, it is clear to us that the intention of the Parliament was clearly to save not only ongoing investigation, inquiry, verification etc. but also to specifically enable the initiation of fresh investigation, inquiry verification etc. in respect of acts and omissions relating to inter alia, the erstwhile service tax regime. Conclusion:- the assessee is obliged to maintain and provide all the records prepared or maintained by it for accounting of transactions with regard to providing of any service; receipt or procurement of input services and payment for such input services; receipt, purchase, manufacture, storage, sale or delivery, as the case may be, in regard to inputs and capital goods; other activities such as manufacture and sale of goods, if any and; all other financial records maintained by him in the normal course of business. A perusal of the notice dated 06.11.2019 shows that the Respondents have called for records which the Petitioner is obliged to maintain in terms of Rule 5 of the Service Tax Rules. Therefore, we do not find merit in this submission either.
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