Extended limitation requires suppression or wilful misstatement; mere non-payment and disclosed accounts do not justify the proviso.

The extended period of limitation for service tax cannot be invoked on mere non-payment of tax unless the Revenue shows suppression of facts or wilful misstatement with intent to evade. Where the assessee's activities and receipts are disclosed in the profit and loss account kept in the ordinary course of business, that disclosure negates a charge of deliberate concealment. On that basis, the proviso to the limitation provision was held inapplicable, and the demand and penalty were set aside.

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Issues: Whether the extended period of limitation could be invoked in the absence of evidence of suppression or wilful misstatement by the assessee.

Analysis: The demand for service tax was founded only on non-payment of tax. The activities and receipts were disclosed in the profit and loss account maintained in the ordinary course of business, which was treated as a public document reflecting the relevant facts. Mere non-payment of tax, without a deliberate act of suppression or misstatement with intent to evade tax, was held insufficient to attract the extended limitation period. Reliance was placed on the principle that something more than ordinary default must be shown before the proviso can be invoked.

Conclusion: The extended period of limitation was not available to the Revenue, and the demand and penalty were set aside.

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