Extended limitation and penalty fail where no suppression is proved and the assessee acted under a bona fide GTA belief.

Extended limitation could not be invoked where the assessee's treatment of transportation services under GTA was based on a bona fide belief that no consignment note meant the service was not GTA, and the department already had the relevant records from audit, so suppression of facts was not proved. The demand was therefore held time-barred and set aside. As the demand itself failed on limitation and no suppression was established, the penalty had no independent basis and was also quashed.

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Issues: (i) Whether the demand was barred by limitation on account of invocation of the extended period; (ii) whether penalty was sustainable when the demand itself was held to be time-barred.

Issue (i): Whether the demand was barred by limitation on account of invocation of the extended period.

Analysis: The demand related to the period 2010-11 to 2013-14, whereas the show cause notice was issued on 30.07.2015. The case rested on the taxability of transportation services under GTA, and it was noted that where no consignment note is issued, the service is not treated as GTA. The appellant's conduct was therefore viewed as arising from a bona fide belief. As the records were already available with the department during audit, suppression of facts was not established.

Conclusion: The invocation of the extended period was unsustainable, and the demand was set aside as time-barred.

Issue (ii): Whether penalty was sustainable when the demand itself was held to be time-barred.

Analysis: Since the demand was not sustainable for limitation reasons and no suppression was found, the basis for penalty did not survive.

Conclusion: The penalties were set aside.

Final Conclusion: The appeal succeeded on limitation, the demand was annulled, and the consequential penalties were also quashed.

Ratio Decidendi: Where the department fails to establish suppression of facts and the assessee acts under a bona fide belief, the extended period cannot be invoked and the consequential penalty cannot survive.

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