TaxTMI 
TaxTMI 
2026 (4) TMI 1658
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....ch is question No. (iii), are as follows: "(i) Whether the Tax Authorities can raise and confirm a Service Tax demand solely on the basis of the entries in Form 26-AS issued by the Income Tax Department, which has not been rebutted by an assessee. (ii) Whether the CESTAT, Kolkata was right in holding that the investigation and the consequential show-cause-notice issued to an assessee was not permissible, by invoking the extended period of limitation under Section 73 of the Finance Act, 1994. (iii) Whether the appellant could have filed an appeal on the basis of a composite notice demanding Service Tax from 4 (four) assessment years, the total of which crosses the monetary limit of Rupees 2 Crores, without any of the Service Tax for each individual assessment year having crossed the above threshold." 4. The appellant challenges the Final Order No.75177/2024 dated 08.02.2024 passed by the learned CESTAT, Kolkata on various grounds, one being that the learned Appellate Tribunal has failed to appreciate the respondent/assessee's conduct, which involves noncompliance with statutory requirements and failure to furnish documentary evidence i.e. suppressio....
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....3. 2016-17 75888391 75888391 15.00 % 11383259 0 11383259 4. 2017-18 (April-June) 275876 275876 15.00 % 41381 0 41381 Total 184771805 18477180 - 26099364 26099364 9. The learned counsel for the respondent submits that the demand for Service Tax made by the appellant had been made in respect of exempted items, in terms of Section 66(D)(a) (iii) and (e) of the Finance Act, 1994, as per the finding of the learned CESTAT. Thus even on merit, the demand for service tax could not have been raised by the appellant. 10. The above being said, the learned counsel for the respondent/assessee submits that the present appeal filed by the CGST Authority was not maintainable, on the ground that the same was not in consonance with the Notification dated 06.08.2024 issued by the Finance Ministry, Legal Cell, regarding the attempt by the Government to reduce Government litigation, by raising the monetary limits for filing Appeals by the departments before the learned CESTAT, High Courts and Supreme Court in Central Excise and Service matters, which are as follows : SI. No. Appellate Forum Monetary ....
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....impugned order of the Adjudicating Authority, it had filed one appeal. However, in terms of the stand taken by the respondent, they should have filed 4 different appeals before the learned CESTAT, Kolkata, and inasmuch as, the Service Tax payable by the respondent pertains to 4 different assessment years. 15. Mr. S. C. Keyal, learned counsel for the appellant, submits that there is no bar for making a composite notice of different assessment years and clubbing the Service Tax payable for different assessment years. He also submits that if the threshold of Rs. 2,00,00,000/- can be achieved, by clubbing the Service Tax payable by a party for different assessment years, an appeal would lie before the High Court in terms of the said notification dated 06.08.2024. In support of his submission, he relied upon the decision of the Single Judge of this Court in the Case of M/s Rasidul Hoque & Ors. Vs. The State of Assam, Through the Commissioner and Secretary to the Government of Assam, Ministry of Finance and Taxation & Ors. reported in 2024 0 Supreme (AS) 9346 and in the case of M/s Mathur Polymers Vs. Union of India & Ors. in WP(C) No. 2394/2025 & CM Appl. No. 11289/2025 decided by th....
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....the Finance Act 1994 read with Section 174 of CGST Act, 2017. However, in terms of second proviso to section 78 of the Finance Act, 1994, the notice has the option to pay 25% of the penalty imposed if they pay the entire amount of Service Tax demanded along with interest and such reduced penalty (here 25%) within thirty days from communication of this order. d. I impose penalty of Rs. 1,20,000/- (Rupees One Lakh Twenty Thousand only) on M/s Rishu Enterprise under Section 70 of the Finance Act 1994 read with Section 174 of the CGST Act 2017 as amended for not filing ST-3 Returns for the relevant period and order for recovery of the same. e. I also impose penalty of Rs. 10,000/-(Rupees Ten Thousand only) on M/s Rishu Enterprise under Section 77 of the Finance Act 1994 read with Section 174 of the COST Act 2017 for failure to furnish information /documents sought by the department and order for recovery of the same." 21. The challenge made to the Adjudicating Authority order dated 23-03-2022 by the respondent/assessee before the learned CESTAT, Kolkata, Regional Bench-Court No. 1, in Service Tax Appeal No. 75509/2022 was allowed, vide Final Order No. 75177/2024 on....
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.... CESTAT Rs. 60 Lakh 2. High Courts Rs. 2 Crore 3. Supreme Court Rs.5 Crore 2. This instruction applies only to legacy issues l.e., matters relating to Central Excise and Service Tax, and will apply to pending cases as well. 3. Adverse judgements relating to the following should be contested irrespective of the amount involved - a. Case where the constitutional validity of the provisions of an Act or Rule is under challenge; or b. Case where Notification/ Instruction / Order/ Circular has been held illegal or ultra vires. 4. Except for the above, all other terms and conditions of Instructions dated 17.08.2011 stands. 5. Relevant extracts from Section 35R of the Central Excise Act, 1944 are reproduced below for ease of reference- (2) Where, in pursuance of the orders or instructions or directions, issued under sub-section (1), the Central Excise Officer has not filed an appeal, application. revision or reference against any decision or order passed under the provisions of this Act, it shall not preclude such Central Excise Officer from filing appeal. application, revision or reference in any other ....
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....2 58450082 14.50% 8475262 0 8475262 3. 2016-17 75888391 75888391 15.00% 11383259 0 11383259 4. 2017-18 (April-June) 275876 275876 15.00% 41381 0 41381 Total 184771805 184771805 - 26099364 26099364 As can be seen from the chart, the Service Tax demand for each assessment year is less than Rs. 2 crores. The Rs. 2 crores mark is reached only when all the service tax demand for 4 years is added together. 28. In the case of Polycott Corporation (supra), the Bombay High Court considered whether an appeal could have been filed before the High Court, if the tax demand did not exceed Rs. 4,00,000/- in terms of the Central Board of Direct Taxes Instruction No. 05/2008 dated May 15th, 2008. Paragraph 5 of the said instruction No. 05/2008 states as follows: "5. It would be clear from the above that if in the case of an assessee if the disputed issues arise in more than one assessment year, appeals are to be filed only in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para. 3. In other word....
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.... (2025-TIOL-1697-HC-MUM-GST), held that a single consolidated show-cause notice covering multiple financial years cannot be issued under Section 74 of the CGST Act. It also held that the judgment in Milroc Good Earth Developers (Supra) had considered the judgment of the Delhi High Court in Ambika Traders Vs. Additional Commissioner, DGGSTI in WP(C) No. 4853/2025 and held that a consolidated notice spanning several years may be permissible, if the pattern of fraud may not be capable of being established in isolation of different financial years. Thus, when there is fraud, which is in a maze of transactions over several years, a consolidated notice may be permissible. However, in the normal course, consolidated notice was impermissible in the absence of exceptional circumstances relating to fraud, that was practiced over multiple financial years warranting such consolidation. Paragraph No. 20 & 21 of the judgment in the case of Aasawa Brothers Corporate Avenue (Supra) are as follows: "20. The statutory scheme under the CGST Act makes the limitation for determination of tax dependent upon the due date for furnishing the annual return for the respective financial year to which....
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....h Court, the issue of a composite notice in respect of different assessment years cannot be made, unless there is an allegation of fraud spanning several years and which may not be capable of being established, if the notice is issued in isolation of each assessment/financial year. 36. The decision submitted by the learned counsel for the respondent pertains to a composite notice being permitted by the Delhi High Court, only in cases of fraud, inasmuch as, fraud may not be capable of being established if the notice was issued in isolation of each assessment/financial year. 37. The Single Bench of the Gauhati High Court in M/s Rasidul Hoque (supra) has held that the authorities had the competence and jurisdiction to pass a composite order for 2 financial years and that the same did not amount infraction of Section 74(10) & 73(1) of the Assam GST Act, 2017. 38. Section 73(1) of the Finance Act, 1994 states as follows : "(1) Where any Service Tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the Service Tax ....
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....tice to the assessee. However, the proviso to section 73 provides that in cases of fraud, collision, willful mis-statement or suppression of facts or contravention of any of the provisions of Chapter-V of the Finance Act, 1994, the limitation period of 30 months would be substituted by the words "five years". 41. In the case of Ambika Traders through proprietor vs. Additional Commissioner, Adjudication, DGGSTI, CGST Delhi North [WP(C) 4853/2025], the Delhi High Court has held that in so far as fraudulently availed or utilized ITC is concerned, the language used in Section 74 (3) & (4) of the CGST Act provides "for any period" and "for such period" respectively, in so far as the issue of consolidated notice for various financial years was concerned. It thus held that a notice can be issued for a period which could be more than one financial year, in so far as the matter related to non-payment or short payment or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud. 42. In this case, the show cause notice dated 31/12/2020 that had been issued to the respondent was with regard to non-disclosure of the gross amount of taxable service provided by....
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....lacks authority to club various financial years/tax periods, in issuing a single consolidated show cause notice under Section 73(1) & (3)/74(1) & (3) of CGST Act lays down the correct position in law? 5) In terms of Article 141 of the Constitution of India, what is the legal position as brought about in the order of the Supreme Court in the case of Mathur Polymers (supra) ?" 44. Thus the issue in the present case is not with regard to fraud, but with regard to suppression of facts on the part of the respondent, for non-payment of their Service Tax, though it is the case of the respondent that the required documents had been submitted before the learned CESTAT. It is clear from the proviso to section 73 (1) of chapter -V of the Finance Act, 1994, that the limitation period for claiming Service Tax on grounds of suppression of facts is 5 years. 45. Though there appears to be no bar for issuing a composite notice for claiming Service Tax on the ground of suppression of facts, when the demand for Service Tax for each assessment year can be determined, the issue of whether an appeal can be filed in the High Court by consolidating the demand for Service Tax for 4 assessmen....