Appeal dismissed, show cause notice quashed due to limitation issues, court allows condonation.

The appeal filed by the revenue was dismissed, upholding the decision of the Writ Court to quash the show cause notice due to limitation issues. The court allowed the condonation of the delay in filing the application. It determined that the writ petition was maintainable as it involved a jurisdictional question. The court held that the extended period of limitation could not be invoked without clear evidence of intent to evade tax, which was lacking in the show cause notice. The show cause notice was deemed invalid and quashed without addressing the service tax claims on their merits.

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Issues Involved:
1. Condonation of delay in filing the application.
2. Maintainability of the writ petition against a show cause notice.
3. Invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994.
4. Validity of the show cause notice issued by the Commissioner of Service Tax.

Detailed Analysis:

Condonation of Delay:
The court addressed the delay of 546 days in filing the application. Upon reviewing the affidavit supporting the application, the court found that sufficient cause was shown for the delay. Consequently, the application for condonation of delay was allowed, and the delay was condoned.

Maintainability of the Writ Petition:
The appellant revenue raised a preliminary objection regarding the maintainability of the writ petition, arguing that determining whether the proviso to Section 73(1) of the Act was rightly invoked involves factual determination and thus should not be entertained by the writ court. The court referred to the Supreme Court decisions in Whirlpool Corporation Versus Registrar of Trade Marks and State of Punjab Versus Bhatinda District Cooperative Milk P. Union Limited, which established that a writ petition challenging the validity of a notice on the ground of being barred by limitation is maintainable despite the availability of an alternate statutory remedy. The court concluded that the writ petition was maintainable as it involved a jurisdictional question.

Invocation of the Extended Period of Limitation:
The show cause notice demanded service tax under three heads and invoked the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. The respondent contended that the notice was barred by time and that the extended period could not be invoked as the necessary ingredients were absent. The court noted that the show cause notice did not indicate how the extended period was justified and emphasized that the burden of proof lies with the authority issuing the notice. The court held that the extended period could not be invoked without clear evidence of fraud, collusion, wilful mis-statement, or suppression of facts with intent to evade tax. The court found no such allegations in the show cause notice, rendering the invocation of the extended period invalid.

Validity of the Show Cause Notice:
The court examined the factual background, including the respondent's registration with the Service Tax Department, search and seizure operations, and subsequent correspondence. The court found that the show cause notice lacked specific allegations necessary to invoke the extended period of limitation. The court also addressed the appellant's argument regarding a previous judgment (APO No. 332 of 2009) and clarified that it had no impact on the present case as it involved a different entity. The court concluded that the show cause notice was barred by limitation and quashed it without addressing the merits of the service tax claims.

Conclusion:
The appeal filed by the revenue was dismissed, and the court upheld the decision of the learned Writ Court quashing the show cause notice on the ground of limitation. The court found no error in the finding that the writ petition was maintainable and that the extended period of limitation could not be invoked without clear evidence of intent to evade tax.

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