2026-VIL-1198-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Demand based solely on Form 26-AS without corroborative evidence and invocation of extended period of limitation – The Revenue issued Notice based entirely on Form 26-AS details without any proper verification, investigation, or corroborative evidence of taxable services rendered by the appellant - Department had raised a query regarding turnover in 2016 to which the appellant provided requisite details, but no further action was taken for approximately three years before the Show Cause Notice was issued invoking the extended period of five years - Whether a demand for service tax can be sustained when the SCN is issued solely on the basis of Form 26-AS entries – HELD - The High Court of Gujarat and multiple coordinate benches of the Tribunal have consistently established that Form 26-AS is a document maintained by the Income Tax Department on a cash or receipt basis for tax deduction purposes and cannot, by itself, establish liability under the Finance Act, 1994. The CBIC instructions dated 26th October 2021 directing that demand notices should not be issued indiscriminately based on differences between ITR-TDS data and service tax returns without proper verification and reconciliation from the assessee - The mechanical reliance on Income Tax data without verification of the nature of receipts or proof of taxable services rendered is impermissible in law. The Department's unexplained delay of three years in making inquiries from a registered assessee after initially raising a query strengthens the position that the demand lacks proper foundation. Accordingly, the demand is set aside on the ground that it cannot be legally sustained when based solely on Form 26-AS without corroborative evidence, and the extended period of limitation is not invokable in such circumstances – The appeal is allowed - Service Tax - Limitation of Appeal and Non-receipt of Order-in-Appeal during COVID period – The appellant did not receive the Order-in-Appeal dated 14.08.2020 during the COVID pandemic and came to know of it only when an account freezing notice was issued in September 2022. The appellant subsequently filed an RTI application on 23.02.2024 and received the order on 02.04.2024, following which the appeal was filed before the Commissioner (Appeals) on 23.04.2024 - Whether the appeal filed beyond the statutory period of 60 days plus the condonable period of 30 days is maintainable or whether the period of limitation should be computed from the date of actual receipt of the order through RTI application – HELD - The appellant's efforts to obtain the copy of the order by knocking the doors of the High Court, filing follow-up letters, and subsequently pursuing the RTI application demonstrate that the appellant made genuine attempts to procure the order and did not receive it despite due diligence. Once the order was received on 02.04.2024, the appellant filed the appeal within one month on 23.04.2024, which falls within the specified period for filing an appeal before the Commissioner (Appeals) - Where the order is not received by the assessee despite reasonable efforts and the order is subsequently obtained through official channels like RTI, the period of limitation should be computed from the date of actual receipt rather than from the date of order. Accordingly, the impugned order dismissing the appeal on the ground of delay is set aside, and the appeal is restored for consideration on merits.
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