Suppression of taxable receipts justified extended service-tax recovery limitation and consequential penalty for non-disclosure in statutory returns.

Failure to file ST-3 returns, disclose gross and taxable receipts, or provide records for verification was treated as deliberate suppression of taxable receipts with intent to evade service tax. Statutory returns required disclosure of gross receipts before abatements or exemptions could be claimed, and an undisclosed abatement claim could not substitute the prescribed disclosure process. The extended recovery period under the proviso to Section 73(1) of the Finance Act, 1994 was therefore considered validly invoked. As the suppression supporting extended limitation was established, the penalty under Section 78 was also considered sustainable.

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Issues: Whether the extended limitation period for recovery of service tax for 2016-17 was validly invoked, and whether the penalty for suppression was sustainable.

Analysis: The appellant, though registered, neither filed ST-3 returns nor disclosed gross receipts, taxable receipts, exempt receipts, abatements, or its service-tax liability for the relevant period. Statutory returns required disclosure of gross receipts before deductions or exemptions could be claimed. The failure to respond to departmental requests for records further prevented verification. The prescribed statutory manner for disclosure could not be replaced by an undisclosed claim of abatements, and a party could not derive advantage from its own default. These circumstances established deliberate suppression of taxable receipts with intent to evade service tax, warranting invocation of the extended period. Since suppression justifying the extended period stood established, the penalty was consequentially justified.

Conclusion: The extended period under the proviso to Section 73(1) of the Finance Act, 1994 was validly invoked, and the penalty under Section 78 of that Act was sustainable; the issue was decided against the assessee.

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