Limitation in service tax demands fails where valid State permission negates any intent to evade tax.

Service tax demand for the disputed period was treated as barred by limitation because the assessee was operating under valid State Government permission as a university. On that factual basis, its conduct was not treated as showing any intent to evade tax, so the extended limitation period could not be invoked. The impugned order granting relief was sustained and the Revenue's challenge failed.

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Issues: Whether the service tax demand for the period September 2003 to January 2005 was time-barred in view of the respondent's permission from the State Government to function as a university.

Analysis: The disputed period was one during which the respondent was operating under valid permission granted by the State Government. On that factual matrix, the respondent's conduct could not be treated as reflecting any intention to evade service tax. The demand was therefore unsustainable on limitation.

Conclusion: The demand was held to be time-barred and the Revenue's appeal was rejected.

Final Conclusion: The impugned order granting relief to the respondent was sustained, and the challenge by Revenue failed.

Ratio Decidendi: Where an assessee acts under valid State permission, a service tax demand cannot be sustained as time-barred on the basis of alleged evasion absent material showing intent to evade.

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