Siddartha Travels vs. Principal Commissioner Of CGST And Central Excise

Held

The Court held that the respondents had not committed any jurisdictional error in invoking the extended period of limitation of five years under the proviso to Sub-Section (1) of Section 73 of the Act of 1994. The Court found that the petitioner had surrendered their service tax registration and had not disclosed transactions in ST-3. Despite repeated requests for information and records during the investigation, the petitioner did not cooperate. The Court reasoned that in such circumstances, the taxing authority's view of suppression, where facts surfaced during investigation were not previously known, was not faulty. Regarding the period for determination of liability under clause (b) of Sub-Section (4B) of Section 73, the Court distinguished the present case from M/S Kanak Automobiles Private Limited and M/S Power Spectrum, noting that the show cause notice was issued during the Corona period and the petitioner filed their defence reply in February 2024, followed by personal hearings. The Court found no reason to interfere with the demand-cum-show cause notice and the impugned order on jurisdictional issues. The Court explicitly stated that it had not entered into the merits of the contentions regarding taxability or the petitioner's argument that service tax is not payable on the gross value of services, as this would require factual appraisal. The Court left these contentions open to be raised before the Appellate Authority. The petitioner was granted four weeks to file a statutory appeal.

Facts

Siddartha Travels, through its proprietor Anil Kumar, filed a writ petition challenging a demand-cum-show cause notice dated 17.10.2020 issued by the Assistant Commissioner of CGST and Central Excise for financial years 2015-16 and 2016-17. The notice proposed a demand of service tax amounting to Rs. 25,25,313/-, along with equivalent penalty and interest. The petitioner also challenged an order dated 04.07.2024 issued by the Dy. Commissioner of CGST and Central Excise, which confirmed the demand, interest, and penalty. The petitioner argued that the demand notice and the subsequent order were barred by limitation. The revenue contended that the petitioner had suppressed facts, justifying the invocation of the extended period of limitation.

Key Issues

1. Whether the demand-cum-show cause notice dated 17.10.2020, issued for financial years 2015-16 and 2016-17, is barred by limitation under the proviso to Section 73(1) of the Finance Act, 1994, considering the normal period of 12 months. 2. Whether the order dated 04.07.2024, confirming the demand, interest, and penalty, is barred by limitation as provided under clause (b) of Sub-Section (4B) of Section 73 of the Finance Act, 1994. Petitioner's arguments: - The demand-cum-show cause notice was issued beyond the prescribed 12-month limitation period under the proviso to Section 73(1) of the Act of 1994. - The order dated 04.07.2024 was issued beyond the period prescribed in clause (b) of Sub-Section (4B) of Section 73 of the Act of 1994. - The petitioner did not deliberately evade service tax, and calculating tax on gross value contrary to the Act does not constitute suppression. - Relied on judgments in M/S Kanak Automobiles Private Limited, Union of India Versus Rajasthan Spinning and Weaving Mills, and M/S Power Spectrum Sarbidipur. - Relied on CBIC Circular Letter dated 13.12.2023 concerning 'fraud' or 'wilful mis-statement' or 'suppression of fact'. Revenue's arguments: - The show cause notice was issued in consonance with principles of natural justice, and the petitioner failed to provide requested documents despite multiple attempts and communication failures. - The extended period of limitation was invoked due to the petitioner's failure to disclose transactions after surrendering service tax registration and not cooperating with the investigation.