2026-VIL-395-GAU-ST
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SERVICE TAX High Court Cases

Service Tax – Extended period of Limitation, Demand based on inference from Form 26AS data - Issue of demand-cum-show cause notice was issued alleging that the petitioner had wilfully suppressed material facts to evade payment of service tax – Maintainability of writ petition - HELD - While the general rule is that a party should first avail the statutory remedy, this rule is not inflexible. The High Court has the discretion to entertain a writ petition even if an alternative remedy is available, particularly where the authority has exceeded its jurisdiction or there is a violation of principles of natural justice - In the present case, the revenue authorities had invoked the extended period of limitation without making the necessary findings required under the proviso to that section. The invocation of the extended period of limitation was contrary to the provisions of the Act and therefore, the assumption of jurisdiction by the revenue authorities was unauthorised - In the present case, the adjudicating authority took into consideration the information available in form 26AS of the Income Tax Act, the sole basis for the purpose of levy of service tax. The authority did not consider the services rendered by the petitioner were exempted from levy of service tax or the liability to pay the service tax on the said services was on the recipient on the services. Since the adjudicating authority did not take into consideration those relevant materials which it was bound to take into consideration and on the other hand it had taken into consideration factors and materials, which if not irrelevant and not germane for deciding the liability of the service tax, cannot establish the liability of the assessee, then the said actions of the adjudicating authority is certainly without jurisdiction - The primary reason for invoking the jurisdiction under section 73(1) is non furnishing of the required documents by the petitioner assessee to be full satisfaction of the respondent authorities. The mere non furnishing of documents or information in itself cannot be construed to have given rise to a situation under any or all of these five conditions under proviso to section 73(1) in order to levy service tax by extending limitation - For the Revenue to invoke the powers under section 73(1), there must be a conclusive finding by the Revenue that the assessee under the facts and circumstances, had wilfully and deliberately evaded or neglected to pay the tax. This conclusion by the Revenue authorities is not apparent and discernible from a plain reading of the impugned order in original - The invocation of extended period of limitation under section 73(1) is invalid and contrary to the prescriptions mandated by law. The impugned order is quashed and set aside – The writ petition is allowed
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