2025-VIL-107-PAT-ST

SERVICE TAX High Court Cases

Service Tax - Limitation, Adjudication of Show Cause Notice - Petitioner was engaged in the business of transportation of goods and foodgrains - Respondents issued show cause notice and passed an ex-parte order holding that the petitioner is engaged in providing taxable services and imposed service tax, interest and penalty - Petitioner challenged the order on various grounds, including that the show cause notice was time-barred, no pre-consultation notice was issued, and the services provided were exempt under the Mega Exemption Notification - Whether the show cause notice was time-barred - HELD - a pre-show cause notice consultation would be mandatory in certain circumstances but pre-consultation notice is not mandatory for the cases booked under fraud, collusion, wilful mis-statement, suppression of facts, evasion of tax etc. - Since the present case was categorized as one of evasion of tax, the extended period of limitation of 5 years under the proviso to Section 73(1) of the Finance Act, 1994 would apply – Further, the delay in adjudication beyond one year was justified as the petitioner sought adjournments but failed to respond substantively - where the petitioner himself was not cooperating and was not responding to the notice issued by the Department, it would not have been possible for the Department to determine the amount of service tax within the period of limitation prescribed under clause (b) of sub- Section (4B) of Section 73 of the Act of 1994 - the Authority would not be wrong in having a reasonable belief that the assessee is not cooperating and providing information in response to the notice with sole intention to evade the tax – The writ petition is dismissed

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