Wilful suppression cannot justify extended limitation where the same tax dispute was already raised in earlier notices.

Extended limitation under the first proviso to Section 73(1) of the Finance Act, 1994 could not be invoked where alleged wilful suppression rested on the same controversy already raised in earlier notices and departmental adjudication. Because those proceedings had already disclosed the taxpayer's stand, the factual foundation for suppression and intent to evade was absent. Mere non-response to some notices was insufficient, especially since the department could proceed ex parte or by best judgment. A bare repetition of statutory language did not establish the required intent, so the show cause notice was unsustainable.

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Issues: Whether the extended period of limitation under the first proviso to Section 73(1) of the Finance Act, 1994 could be invoked on the basis of alleged wilful suppression of facts when the same controversy had already been the subject of earlier show cause notices and departmental adjudication.

Analysis: The impugned notice proceeded on the footing that the petitioner had suppressed material facts and failed to disclose taxable value in relation to payments made to overseas representatives and receipts from outbound tour services. The record showed, however, that the very same controversy had been raised in earlier notices, on identical allegations, and those proceedings had already disclosed the petitioner's stand to the department. In such circumstances, the necessary factual foundation for alleging suppression was absent. The mere non-response to some earlier notices could not, by itself, establish wilful suppression, particularly when the statute enabled the department to proceed ex parte or by best judgment in case of non-cooperation. The invocation of the extended period also required specific material showing intent to evade, and a bare repetition of statutory language in the notice was insufficient.

Conclusion: The invocation of the extended period of limitation was not justified and the impugned show cause notice could not be sustained.

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