Limitation period for demand of Late Fee

[Shyam Naik]

Dear All,Whether the limitation period for demand of service tax shall apply to demand of fee for late filing of Service Tax return?

AI Summary

Limitation for demand of late fee may be governed by the reasonable-period principle aligning with service tax limitation.
Recovery of the Late Fee under the Service Tax Rules was mandatory except where gross tax payable was nil; the department may use statutory recovery powers but must consider limitation provisions. If a show cause notice is issued to demand the late fee, it must be issued within a 'reasonable period', and it is arguable that the limitation period applicable to service tax demands constitutes that reasonable period since both demands arise under the same legal framework.