- (1.) Vires of Rule 5A(1) of the Service Tax Rules, 1994 is under challenge on the ground that the same is contrary to Section 82 of the Finance Act.
(2.) Law is well settled that a subordinate legislation which owes its origin to an enactment cannot supplant but only supplement it. This is based on the premise that a stream cannot rise over its source. Upon hearing the parties, prima facie the Bench perceives the challenge to Rule 5A(1) to be well founded, as it seeks to override the section. It appears that Rule 5A(2) has been declared ultra vires by an Hon'ble Division Bench of the Delhi High Court. This Bench prima facie finds no reason to disagree with such decision. If the authorities cannot make any demand as envisaged in sub -rule (2), gaining access to any premises under sub -rule (1) may not serve any purpose. In that view of the matter, the respondents are restrained from taking recourse to Rule 5A(1) against the petitioner, and the petitioner shall also not be under any liability to place books/accounts, etc. if any demand is made. The respondents shall, however, be free to take recourse to Section 82 of the Finance Act in accordance with law.
(3.) It further appears that summons have been issued to the petitioner requiring its presence at an office in Chennai with required documents. The petitioner shall be at liberty to respond to such summons and to make available the required documents. The respondents may proceed in accordance with law but no coercive action shall be taken against the petitioner without obtaining leave of the Court. This interim order is passed based on the satisfaction that an inquiry, which is a pre -condition for issuance of summons, is not apparent from such summons and that instructions contained in the circular letter dated 20th January, 2015 may have been observed in the breach.;