Tax liability must be established based on actual statutory provisions, not presumptions; authorities cannot invoke extended limitation without finding willful non-disclosure.

JUDGMENT :

SOUMITRA SAIKIA, J.

This writ petition is filed by the petitioner who is the partnership firms namely, M/S Technocom having its office situated at Kamrup Chamber Road, Fancy Bazar, Guwahati. The petitioner was registered under the VAT Act, 2003 and under the relevant provisions of the Finance Act, 1994 and discharged his taxable liabilities under the respective Act. The petitioner is engaged in the business of execution of contract with Railways as Contractor. For the Financial Year 2016- 17, a show cause notice dated 22.10.2022 was issued by the Principal Commissioner, GST & Central Excise Commissionerate alleging inter-alia that the petitioner had suppressed the actual value of services provided during the financial year 2015-16 and did not fully disclose its liability in its ST-3 returns for the Financial Year 2016-17 and had consequently short paid its service tax dues to the tune of Rs. 9,37,91,059/- in violation of Sections 66B, 67, 68 and 70 of the Finance Act, 1994 read with Rule 6 & 7 of the Service Tax Rules, 1994.

2. It is also alleged that from the third party data provided by the Income Tax Department, the petitioner had declared Rs. 63,62,45,475/- as sale of services in Income Tax Return but the petitioner had declared the gross value of services in ST-3 returns as Rs. 1,09,71,749/- only. The Principal Commissioner, GST & Central Excise Commisionerate alleged in the show cause notice that from the information received from the Income Tax Department that the during the Financial year 2016-17, the Petitioner suppressed taxable value amounting to Rs. 62,52,73,726/- and on such value of services, the Service Tax amounting to Rs. 9,37,91,059/- was required to be paid by the Petitioner to the Government exchequer which the Petitioner did not pay and the same was required to be recovered under proviso to Section 73(1) of the Finance Act,1994 by invoking extended period of limitation along with interest at appropriate rate under Section 75 of the Finance Act 1994.

3. The Petitioner submitted its reply on 26.10.2021 to the show cause notice dated 22.10.2021. In the said reply, the Petitioner submitted that the Petitioner received work orders in the nature of works contracts for execution of construction, erection, commissioning or installation of original works pertaining to Railways and AMC services. The Petitioner also enclosed few work orders along with reply for the purpose of showing the nature of work. It is submitted that the Petitioner as a main contractors for the work awarded by the Railways also engaged sub-contractor for full or partial execution of the contracts pertaining to Railways. In the said reply, the Petitioner also informed that the contracts undertaken by the Petitioner were pertaining to Railways and the same was exempted from payment of service tax under Entry No. 14 (a) of the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 w.e.f. 01.07.2012 as amended. The Petitioner also submitted in its reply that for the contract related to AMC services, the Petitioner has paid Service Tax and had also filed its return. In the said reply the Petitioner also enclosed Audited Balance sheet, Contract A/c and Profit & Loss with Schedules for the Financial Year 2016-17. The Petitioner in its reply also enclosed, audited financial statements prepared on mercantile basis and the