Limitation for service tax demand cannot be extended absent deliberate suppression in a bona fide subcontracting dispute.

The extended period of limitation under the proviso to Section 73 of the Finance Act, 1994 could not be invoked against a sub-contractor where non-payment of service tax arose from a bona fide interpretational dispute and there was no deliberate suppression of facts with intent to evade tax. The Court noted that certificates showing tax payment by the main contractor were available, the assessee's case raised a real concern of double taxation, and the sub-contractor's liability remained uncertain until a later larger Bench ruling. In these circumstances, the omission in the ST-3 return did not amount to suppression, so recovery was confined to the normal period.

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Issues: Whether the extended period of limitation under the proviso to Section 73 of the Finance Act, 1994 could be invoked against a sub-contractor when the non-payment of service tax arose from a bona fide interpretational dispute and the main contractor had already discharged the tax liability.

Analysis: The dispute turned on whether the respondent's omission to disclose payment of service tax in the ST-3 return amounted to suppression of facts with intent to evade tax. The record showed that certificates from the main contractor evidencing payment of service tax were available, and the assessee's stand was that the tax had already been paid by the main contractor, making the issue one of possible double taxation. The Court relied on the settled principle that suppression must be deliberate and cannot be equated with a mere omission where the controversy is interpretational. It also noted that the liability of a sub-contractor had remained uncertain until the larger Bench decision in 2019, showing that two plausible views existed during the relevant period. In such circumstances, bona fide belief negates suppression and the extended period cannot be mechanically applied.

Conclusion: The proviso to Section 73 of the Finance Act, 1994 was not invocable on the facts, and the Tribunal's direction to restrict recovery to the normal period was and sustainable.

Ratio Decidendi: Where non-payment of tax arises from a bona fide interpretational dispute and there is no deliberate suppression of facts with intent to evade tax, the extended period of limitation cannot be invoked.

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