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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) KOHIMA BENCH
DEVASHIS BARUAH
Rana Deb Saikia, S/o. Guna Kanta Saikia – Appellant
Versus
Union Of India, Represented By Its Secretary To The Government Of India, Department Of General Service Taxes – Respondent
JUDGMENT :
DEVASHIS BARUAH, J.
Heard Mr. U. K. Das, the learned counsel appearing on behalf of the Petitioner and Mr. S. C. Keyal, the learned Standing Counsel appearing on behalf of all the Respondent Nos. 1 to 4.
2. The present writ petition has been filed challenging the order dated 25.11.2022 passed by the Respondent No.2 thereby imposing a liability of service tax to the tune of Rs.2,27,27,960/- for the Financial Year 2016-17 and further penalty in terms with Sections 77 and 78 of the Finance Act, 1994 along with interest.
BRIEF FACTS OF THE INSTANT CASE:
3. The brief facts which led to the filing of the instant writ petition are that a Demand cum Show Cause Notice was issued on 20.10.2021 alleging inter alia that the Petitioner had made willful suppression of material facts to evade payment of service tax to the tune of Rs.2,27,27,960/- including Krishi Kalyan Cess and Swachh Bharat Cess on the services rendered by the Petitioner during the Financial Year 2016-17 thereby violating the provisions of Sections 66B, 67 and 68 of Chapter-V of the Finance Act, 1994 read with Rule 6 and 7 of the Service Tax Rules, 1994. In addition to that, vide the said Show Cause Notice dated 20.10.202
The court emphasized that claimants must substantiate their exemption claims with credible documentation, and the existence of an effective alternative remedy limits the exercise of writ jurisdiction....
Court held that proper grounds for invoking extended limitation for tax demands must demonstrate intent to evade payment, and procedural fairness must be maintained in tax assessments.
Tax liability must be established based on actual statutory provisions, not presumptions; authorities cannot invoke extended limitation without finding willful non-disclosure.
Court held that tax demands require adherence to statutory limits, and if payment is made prior to notice issuance, penalties are not justified.
The burden of proof lies on the party claiming exemption from service tax, and mere non-payment does not justify invoking the extended period of limitation without evidence of intent to evade tax.
The demand for service tax was invalid due to the lack of evidence for willful suppression or fraud, making the issuance of the show cause notice time-barred.
The extended limitation for service tax demands was improperly invoked due to lack of evidence supporting suppression of facts.
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