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2014 (12) TMI 417 - HC - Service TaxValidity of Rule 5A - power to audit of service tax records - Validity of communication dated 24.09.2014 as at Annexure¬B to the petition under which the Assistant Audit Officer of Principal Director Auditor (Central) has communicated the petitioner that the audit of service tax revenue records of the petitioner's unit would be conducted by a party from the office of the Principal Director Auditor (Central), Gujarat, Ahmedabad in the last week of September 2014 - Held that:- Delhi High Court in case of Travelite (India) Ltd. (2014 (8) TMI 200 - DELHI HIGH COURT) has struck down Rule 5A as unconstitutional. However, Allahabad High Court in case of A.C.L. Education Centre (P.) Ltd. v. Union of India reported in [2014 (1) TMI 1562 - ALLAHABAD HIGH COURT], upheld the vires of the Rule on a concession being made by the counsel for the Union that for the purpose of collecting the information from the assessee to assess the correct tax, the Commissioner may appoint a Chartered Accountant for the purpose of audit and that audit will not be done by any other officer on his behalf. Prima facie, therefore, if Rule 5A is not valid, a serious question of the powers of the authority to issue the impugned communication would arise. Subsidiary question would be, even if Rule 5A is valid, would the communication in question be covered within the powers of the Commissioner as envisaged under sub¬rule (1) of Rule 5A, which empowers the Commissioner to authorize any person to carry out the inquiry with respect to the accounts of an assessee. Whether such authorized persons can be an outsider of the organization of the Commissioner would also be an issue. - Learned Standing Counsel Shri Qureshi waived rule on behalf of the Union of India. - respondents are prevented from proceeding further in connection with the impugned communication - Application disposed of.
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