Double taxation on works contract services and absence of suppression barred service tax demand and extended limitation.

Service tax could not be confirmed again against the service provider where the same works contract services had already been taxed and paid by the recipient under reverse charge, because double recovery on identical taxable services was impermissible. The extended limitation period was also unavailable since the relevant receipts were already disclosed in income tax records, negating suppression or wilful misstatement for evasion. On those grounds, the impugned demand and related penalty consequences were set aside.

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Issues: (i) Whether the service tax demand could be sustained when tax on the same works contract services had already been paid by the service recipient under reverse charge; (ii) Whether the extended period of limitation was invocable on the facts of the case.

Issue (i): Whether the service tax demand could be sustained when tax on the same works contract services had already been paid by the service recipient under reverse charge.

Analysis: The service recipient had deposited the entire service tax on the works contract services rendered by the appellant. Once tax had already been paid on the same services, confirming the demand again against the appellant would amount to taxing the same transaction twice. The legal position adopted was that after accepting tax from the service recipient, the department could not confirm the same liability again against the service provider in respect of identical services.

Conclusion: The issue is decided in favour of the assessee and against the Revenue.

Issue (ii): Whether the extended period of limitation was invocable on the facts of the case.

Analysis: The demand was based on figures reflected in the income tax return, which was treated as a public document. When the relevant receipts were already disclosed in such records, suppression or wilful misstatement to evade tax could not be inferred for invoking the longer limitation period. On that basis, the extended period was not available to the Revenue.

Conclusion: The extended period of limitation was not invocable and this issue is decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appellant obtained relief from the service tax demand and the related penalty consequences.

Ratio Decidendi: Tax already paid on the same taxable services by the recipient cannot be again confirmed against the provider, and disclosure of the relevant receipts in income tax records negatives suppression for invoking the extended period of limitation.

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