Service tax cannot rest on Form 26AS alone; exemption and limitation findings must be established before demand is sustained.

Service tax cannot be fastened merely from Form 26AS entries; the taxable nature of the underlying works contracts had to be examined, including the claimed exemption for services rendered to Government entities. On the facts stated, reliance only on third-party income-tax data was insufficient, so the levy on the receipts was unsustainable. The extended limitation under Section 73(1) of the Finance Act, 1994 could be invoked only on a clear finding of fraud, collusion, wilful misstatement, suppression of facts, or intent to evade tax; absent such jurisdictional findings, the demand was time-barred. The article also notes that the writ court may intervene despite an alternative appeal where jurisdiction itself is in issue.

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Issues: (i) Whether service tax could be levied on the petitioner's receipts merely on the basis of Form 26AS without examining whether the underlying works contracts were exempt under the relevant exemption notification; (ii) Whether the extended period of limitation under Section 73(1) of the Finance Act, 1994 could be invoked in the absence of a conclusive finding of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax; (iii) Whether the writ petition was entertainable despite the availability of the statutory appellate remedy.

Issue (i): Whether service tax could be levied on the petitioner's receipts merely on the basis of Form 26AS without examining whether the underlying works contracts were exempt under the relevant exemption notification.

Analysis: Liability to tax must arise from the charging provision and cannot be imposed by inference, analogy, or presumption. The receipts reflected in Form 26AS only evidenced tax deduction at source and did not, by themselves, establish that the underlying transactions were taxable under the Finance Act, 1994. The record also disclosed the petitioner's claim that the contracts were works contracts rendered to Government entities and fell within the exemption under Notification No. 25/2012-Service Tax dated 20.06.2012. The adjudicating and appellate authorities failed to examine the exempt character of the services and instead proceeded only on the basis of third-party income-tax data.

Conclusion: The levy of service tax on the petitioner's entire receipts on the basis of Form 26AS was unsustainable and was set aside.

Issue (ii): Whether the extended period of limitation under Section 73(1) of the Finance Act, 1994 could be invoked in the absence of a conclusive finding of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax.

Analysis: The extended limitation period is an exception and can be used only when the jurisdictional facts specified in the proviso to Section 73(1) are established. Mere non-furnishing of documents or the absence of voluntary payment is not enough. The impugned order did not record a clear and conclusive finding that the petitioner had acted with the requisite intent to evade tax, and the invocation of the extended period was founded on an assumption rather than on the statutory preconditions. In such circumstances, the assumption of jurisdiction itself was unauthorized.

Conclusion: Invocation of the extended period of limitation was invalid and the demand was barred by limitation.

Issue (iii): Whether the writ petition was entertainable despite the availability of the statutory appellate remedy.

Analysis: The availability of an alternative remedy is a rule of policy and discretion, not an absolute bar to writ jurisdiction. Where the impugned action is without jurisdiction, contrary to law, or vitiated by a failure to satisfy statutory preconditions for assumption of power, the High Court may interfere under Article 226 notwithstanding the appellate remedy. Since the core challenge went to the very jurisdiction to invoke Section 73(1), the writ court was justified in entertaining the petition.

Conclusion: The writ petition was maintainable and could be entertained despite the statutory appeal remedy.

Final Conclusion: The tax demand, penalty, interest, and the appellate affirmation could not stand because the levy was founded on an improper evidentiary basis and the extended limitation was invoked without the necessary jurisdictional findings.

Ratio Decidendi: A taxing authority cannot impose tax by presumption from third-party data, and the extended limitation under Section 73(1) can be invoked only upon a conclusive finding of the specific statutory ingredients showing deliberate evasion.

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