TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 147
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....ions and writs as this Hon'ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice, including the costs of this writ petition. 2. Heard Shri. Rajesh Chander Kumar, learned Senior Counsel appearing for the petitioner and Shri. Jeevan J. Neeralgi, learned counsel appearing for the respondent and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior Counsel for the petitioner invited my attention to the impugned show-cause notice at Annexure-A dated 22.04.2021 in order to point out that the necessary ingredients of Section 73(1) of the Finance Act, 1994 has not been complied with and conspicuously absent/missing from the impugned show-cause notice. In this context, it is pointed out that without any basis, the respondent seek to justify invocation of the extended period of limitation and in the absence of any supporting material in this regard, the impugned show-cause notice is illegal, arbitrary and without jurisdiction or authority of law and contrary to Section 73(1) of the Finance Act and the same deserves to be quashed. ....
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....hat the Service Provider has provided the taxable services and collected service consideration but have not paid/short paid the Service Tax and also failed to file/declare in the prescribed statutory returns. When the law requires a Service Provider to assess tax himself with full disclosure and file returns and the assessee fails to do so, the intension to evade tax is evident on record. It appears that they have suppressed facts from the knowledge of the Department with the intention to evade payment of Service Tax on the services provided by them. Therefore, it appears that the Service Tax amounting to Rs. 7,55,29,015/- (ST: Rs. 7,29,24,566/- and SBC: Rs. 26,04,449/-) for the period from April, 2015 to March, 2016, is liable to be demanded and recovered from them in terms of proviso to Section 73(1) of the Act, since the omission and commission by the Service Provider appears to be covered under clause (c), (d) and (e) of proviso to Section 73(1) of the Act. As the Service Provider had failed to pay/short paid the Service Tax in time they are also liable to pay interest, at applicable rates, in terms of Section 75 of the Finance Act 1994. It further appears that the Service Prov....
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.... both fact and law involved therein. The Tribunal, in our opinion, committed a manifest error in not determining the said question, particularly, when in the absence of any finding of fact that such short-levy of excise duty related to any positive act on the part of the appellant by way of fraud, collusion, wilful mis-statement or suppression of facts, the extended period of limitation could not have been invoked and in that view of the matter no show cause notice in terms of Rule 10 could have been issued". 10. So also, in STEMCYTE INDIA THERAPEUTICS PRIVATE LIMITED's, case supra, the Apex Court held as under: "9.4. Therefore, in the absence of fraud, collusion, wilful misstatement, or suppression of facts with an intent to evade payment of service tax, the invocation of the extended period of limitation under Section 73 of the Finance Act, 1994 is wholly unwarranted. Mere non-payment of service tax, by itself, does not justify the invocation of the extended limitation period. Accordingly, the show cause notice issued by the department is clearly time-barred. On this ground alone, the impugned order deserves to be set aside". 11. The aforesaid two judgments of the ....
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....ing information/details for the purpose of evading the payment of tax which forms the sine qua non of Section 74 of the CGST Act, is not satisfied in the instant case; the jurisdictional fact for invoking the stringent provisions of Section 74 of the CGST Act, that is of wilful suppression with a view to evade payment of tax are neither satisfied nor fulfilled in the impugned SCN, which deserves to be quashed on this ground also. 24. In the case of Cosmic Dye Chemical vs. Collector of Central Excise, Bombay - (1995) 6 SCC 117, the Apex Court held that the word 'wilful', which precedes suppression, requires the existence of an intent to evade duty as hereunder: 6. Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are clearly qualified by the word 'wilful' preceding the words "misstatement or suppression of facts" which means with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or rules" are again qualified by the immediately following words "with intent t....
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....roducts of the appellant from time to time and, in fact, had inspected the products of the appellant. Classification lists supplied by the appellant were duly approved and in view of the admitted fact that the flow-chart of manufacturing process submitted to the Superintendent of Central Excise on 17-5-1990 clearly mentioned the fact of post-forming process on the rubber, the finding on "suppression of facts" of CEGAT cannot be approved by us. This Court in the case of Pushpam Pharmaceuticals Co. v. CCE [1995 Supp (3) SCC 462] while dealing with the meaning of the expression "suppression of facts" in the proviso to Section 11-A of the Act held that the term must be construed strictly, it does not mean any omission and the act must be deliberate and wilful to evade payment of duty. The Court further held: (SCC pp. 463-64, para 4) "In taxation, it ['suppression of facts'] can have only one meaning that the correct information was not disclosed deliberately to escape payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." (emphasis supplied) 27. Relyi....
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....es, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 28. As stated earlier, though the respondents allege in the impugned SCN that the petitioner failed to mention the value of services correctly in the GSTR-5A returns and apply the correct GST rate on the consideration received, the mere omission to mention the value of services correctly in the returns and/or apply the correct GST rate would not be tantamount to wilful suppression, in light of the principles laid down in the aforesaid judgments, particularly when the respondents-Revenue had in their knowledge the complete gamut of transactions of supply of Type-III tests by the petitioner, thereby leading to the sole conclusion that an intention to evade payment of tax could in no manner be imputed or attributable to the petitioner and the impugned SCN deserves to be quashed. ....
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....d goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the products other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findings of the Tribunal have not been challenged before us or before the Tribunal itself as being based on no evidence." 23. We also find no merits in the other argument urged by the learned counsel for the Revenue that the Tribunal's order in IFGL Refractories [IFGL Refractories Ltd. v. CCE, 2000 SCC OnLine CEGAT 1771 : (2001) 134 ELT 230] could not have constituted a valid basis for the belief entertained by the assessee in view of the fact that the relevant valuation provisions had undergone amendments in the year 2000. The argument of the Revenue's counsel was that in view of t....
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....interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation by considering the assessee's view to be lacking bona fides. In any scheme of self-assessment it becomes the responsibility of the assessee to determine his liability of duty correctly. This determination is required to be made on the basis of his own judgment and in a bona fide manner. 30. In the instant case, as stated supra, in the light of pendency of W.P.No.3555/2021 preferred by the petitioner before this Court assailing the order of the AAAR, the very issue/question relating to classification of Type-III tests supplied by the petitioner as OIDAR services, remains in a significant state of flux inasmuch as at the very initial stage of the litigation, the AAR vide its order dated 22.05.2020 held that Type-III tests were outside the purview of OIDAR services which was reversed by the AAAR, thereby indicating that the very classification of Type-3 tests as OIDAR services was uncertain and in a constantly fluid state and thus an interpretative issue which has not attained finality and the classification and taxability of Type-III Tests continues to be in a stat....