Audit under Service Tax only by Chartered Accountants - not by officers of Department: HC
'AUDIT' is a very misunderstood word. For a long time, I used to believe that audit is in the exclusive domain of a qualified auditor like a Chartered Accountant. Then I saw officers of the Central Excise Department who did not know the difference between credit and debit 'auditing' the accounts of mega corporate entities. But 'Audit' remains a terror word among assessees and the visit of the Audit party either from the Central Excise Department or from the CAG, is not exactly welcomed by the assessee.
In recent times, writs have been filed in High Courts challenging the power of the CAG to visit the premises of the assessees and the High Courts of Calcutta, Delhi and Karnataka have given favourable interim orders. Within the mortal limits of modesty, I would claim to be a pioneer of sorts on this issue, as I am the first person to raise this issue in an article in ELT more than 10 years ago - Can/should CAG's Audit visit factories for Excise Audit?. I had jocularly mentioned that an "Accountant General" is an accountant getting the salary of a General. The CAG was so angry that I almost lost my job.
According to a recent judgement of the Lucknow Bench of the Allahabad High Court, the Service Tax officers have no power to audit the assessees and Audit can be done only by Chartered Accountants and in the case of PSUs by the CAG.
Here is the Bomb!