Service tax demand based only on Form 26AS failed where extended limitation was unsupported by jurisdictional facts and exemption was not examined.

Service tax demand based solely on Form 26AS was unsustainable where the department did not independently examine the nature of services rendered or the applicability of the exemption claimed under Notification No. 25/2012-ST. The Gauhati HC also held that invocation of the extended period under the proviso to Section 73(1) requires jurisdictional facts such as fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax, and the record did not establish those conditions. The demand, interest and penalties were therefore set aside and the impugned orders were quashed.

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Issues: Whether the service tax demand, interest and penalties confirmed against the petitioner on the basis of Form 26AS and by invoking the extended period under the proviso to Section 73(1) of the Finance Act, 1994 were sustainable in law, and whether the impugned orders were liable to be quashed.

Analysis: The petition was treated as covered by an earlier coordinate Bench decision on similar facts. The demand had been founded solely on Form 26AS without independent examination of the nature of services rendered or the applicability of the exemption claimed under Notification No. 25/2012-ST dated 20.06.2012. The invocation of the extended period also required the statutory preconditions of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax, and the record did not disclose any conclusive finding establishing those jurisdictional facts. On that basis, the assumption of jurisdiction under the proviso to Section 73(1) was held unsustainable, and the consequential levy of interest and penalties could not survive.

Conclusion: The service tax demand, interest and penalties were held unsustainable and the impugned orders were set aside and quashed.

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