Extended period of limitation fails where suppression is not proved and the demand rests only on return mismatches.

Extended-period service tax demand was found unsustainable where the notice relied only on a mismatch between Income Tax Returns and ST-3 returns, without independent verification or evidence of wilful suppression. The assessee was a registered service tax filer, had submitted returns, and produced documentary material that materially reduced the proposed demand. The record also did not show that service tax had been collected from customers. On these facts, the extended period of limitation was not invocable, and the confirmed demand was set aside on limitation.

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Issues: Whether the demand for the extended period could be sustained in the absence of detailed verification or evidence of suppression, and whether the appeal could be disposed of on limitation without examining the merits.

Analysis: The demand notice was founded only on a discrepancy between the Income Tax Returns and the ST-3 returns, without any independent investigation to establish wilful suppression or non-disclosure. The assessee was a registered service tax registrant, had been filing returns, and had produced documentary material that substantially reduced the proposed demand. The record also did not show that service tax had been collected from customers. On these facts, the invocation of the extended period was not supported.

Conclusion: The extended period of limitation was not invocable, and the confirmed demand was set aside on limitation.

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