The petitioner is a stock broker. It is registered with the service tax department. It received a notice for audit to be conducted by CERA. Such notice was challenged before the Hon’ble Gujarat High Court on the ground, inter alia, there is no jurisdiction to conduct audit in terms of Rule 5A of the Service Tax Rules as the same is _ultra vires _the provisions of the Finance Act. Reliance was placed on decision of the Hon’ble Delhi High Court holding that the said rule is unconstitutional.
The petition was admitted and the audit proceedings were stayed. However, subsequently, the Hon’ble High Court, at the request of the Revenue, directed that the Revenue can conduct the audit but not finalize the audit report as the Hon’ble Supreme Court has stayed the decision of the Hon’ble Delhi High Court. This order was challenged in SLP before the Hon’ble Supreme Court.
The Hon’ble Supreme Court issued notice and stayed the variation of the stay order. It directed that the earlier order granting stay from conduct of the audit proceedings would continue.
M/S. Marwadi shares and Finance Ltd. v. Union of India (SLP No. 27124/2023) (SC)
