Extended limitation cannot be invoked against statutory bodies absent suppression of facts in service tax disputes

Extended period of limitation was considered inapplicable where a State Government corporation had no contumacious conduct or suppression of facts in relation to disputed service tax on renting of immovable property; on that reasoning, the demand was treated as time-barred. The Tribunal relied on its earlier view and Circular No. 89/7/2006-ST to note that mere non-payment during a period of taxability dispute does not justify alleging mala fide against a statutory body.

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Issues: Whether the extended period of limitation could be invoked against a statutory body in the absence of contumacious conduct or suppression of facts, and whether the demand was time-barred.

Analysis: The appellant was a State Government corporation and the dispute related to service tax liability on renting of immovable property for the relevant period. The Tribunal followed its earlier view that a statutory body cannot be fastened with the allegation of suppression or mala fide merely because tax was not paid during a period when the taxability was under dispute. In the absence of contumacious conduct or suppression of facts, invocation of the extended period was held impermissible. The Tribunal also noted the guidance in Circular No. 89/7/2006-ST concerning tax liability of statutory organisations.

Conclusion: The extended period of limitation was not invocable and the demand was barred by limitation; the appeal succeeded.

Ratio Decidendi: Extended limitation cannot be invoked against a statutory body unless the revenue establishes suppression of facts or contumacious conduct.

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