Local traders have urged the commissioner of the Central Board of Excise and Customs (CBEC) to stop the ongoing audit of service tax in Ranchi zone following a Delhi high court order of June 6. The court had declared central excise and service tax audit manual as illegal.

"The court said the manual issued do not have any statutory backing (and) hence audit undertaken by officers of the service tax department is not legally justified," said Singhbhum Chamber of Commerce and Industry (SCCI) in a letter faxed to the Ranchi zone tax commissioner. In its judgment, the court had quashed Rule 5A(2) that is related to the manual issued by the Directorate General of Audit of the CBEC.

"It is clear from the Delhi court's judgment that the audit conducted or to be conducted by service tax officers of the service tax assessee are not legally justified and valid," said SCCI general secretary Prabhakar Singh. He added that the industry feels service tax providers/recipients are harassed during the audit on the pretext of verification of records and suffer from vice of excessive delegation.