2026-VIL-134-GAU-ST
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SERVICE TAX High Court Cases

Service Tax - Invocation of extended period of limitation under Section 73(1) of the Finance Act, 1994 - Liability to pay service tax on execution of contract with Railways - Petitioner submitted that the contracts undertaken by it were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14(a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 - Whether the respondent authorities were justified in invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 and in levying the service tax, interest and penalty on the petitioner – HELD - For invoking the extended period of limitation under Section 73(1), the authorities must arrive at a specific conclusion that the case falls under any of the conditions specified in the proviso to Section 73(1), i.e. fraud, collusion, willful misstatement, suppression of facts or contravention of any provisions of the Act with the intent to evade payment of tax. However, in the present case, the impugned order-in-original did not contain any such finding by the authorities - Mere non-furnishing of documents or information cannot be construed to have given rise to a situation under any or all of these five conditions under the proviso to Section 73(1) to levy service tax by extending the limitation. The authorities had proceeded on the basis of the information available in Form 26AS obtained from the Income Tax Department, without examining whether the services rendered by the petitioner were liable to service tax under the Finance Act, 1994. The tax cannot be imposed on the basis of inferences and analogy, and there must be a declaration of liability under the statute - The invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994 by the respondent authorities is not justified - The impugned order-in-original is quashed and the writ petition is allowed
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