Extended limitation period for tax demands requires evidence of deliberate suppression or intent to evade tax; mere non-payment is insufficient.

SANJIV SRIVASTAVA:

This appeal is directed against Order-in-Appeal No.GZB/EXCUS/000/APPL/MRT/12/2025-26 dated 30/06/2025. passed by Commissioner (Appeals) CGST, Meerut By the impugned order following has been held:-

“ORDER

In the light of the discussion and findings recorded above, I set aside the Impugned Order-In-Original No. 35/GST/AC/D-III/GZB/T.P.S.Tax/2024-25 dated 10.07.2024 and allow the present appeal bearing No. No.79-ST/APPL-MRT/GZB/2024-25 dated 27.11.2024 filed by the Commissioner, Central GST Commissionerate, Ghaziabad through the Assistant Commissioner, Central GST, Division-III, Ghaziabad partially by way of remand to the adjudicating authority as discussed supra.”

2.1 Appellant is registered with the Service Tax Department for providing taxable services as defined under Section 65B (44) of the Finance Act, 1994 . They hold three registration nos. as detailed below:-

 Registration No.AAACR6837PSD005

 Registration No.AAACR6837PSD001

 Registration No.AAACR6837PSD003

2.2 On the basis of third party information received from the Income Tax Department for the financial year 2016-17, it was observed that appellant has declared amounts to the income tax which do not tally with the figures shown in the ITR of the appellant. Accordingly, show cause notices were issued to each of the registrant as detailed in table below:-

All the three show cause notices called upon the appellant to show cause as to why:-

“(i) The Service Tax amounting to Rs. 3262470/- (Rs 45,31,053/- in the show cause notice at S No 2 and 3) should not be demanded and recovered from them under proviso to Section 73 (1) of the Finance Act, 1994 read with Section 142and Section 174 of the CGST Act, 2017 .

(ii) The due interest on the Service Tax amounting to Rs. 3262470/- (Rs 45,31,053/- in the show cause notice at S No 2 and 3) should not be demanded and recovered from them under Section 75 of the Finance Act, 1994 read with Section 142and Section 174 of the CGST Act, 2017 .

(iii) Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 read with Section 142and Section 174 of the COST Act, 2017 for failure to pay service tax and suppressing the facts and value of taxable service with intent to evade payment of service tax.

(iv) Late fee should not be recovered from them for non filing of ST-3 returns under Section 70 of the Finance Act, 1994 read with Section 142 and Section 174 of the CGST Act, 2017 .

(v) Penalty should not be imposed upon them under Section 77 (1)(c) of the Finance Act, 1994 read with Section 142 and Section 174 of the CGST Act, 2017 for not furnishing the proper records.

(vi) Penalty should not be imposed upon them under Section 77 (2) of Finance Act 1994.”

2.3 Above stated all the three show cause notices were individually adjudicated as indicated in table below:-

2.4 All the three Orders-in-Original were challenged before Commissioner (Appeals), who vide Order-in-Appeal No.GZB- EXCUS-000-APPL-MRT-224-226 dated 27.03.2024 remanded back the matter to Original Authority to decide the case afresh for examining the facts of the case in respect of given centralized registration of the appellant.

2.5 In remand proceedings, Adjudicating Authority vide Order- in-Original No.35/GST/AC/D-III/GZB/T.P./S.Tax/2024-25 dated 10.07.2024 dropped all the demands.

2.6 Aggrieved revenue have filed appeal before Commissioner (Appeals) on the following grounds:-

“3.1 That the Impugned order dated 10.07.2024 has apparently been passed by the Adjudicating Authority without considering the issues to be examined as directed by the Hon'ble Commissioner (Appeals), Meerut and thus appears to be arbitrary and bad in law.

3.2 That the Adjudicating Authority has not examined the two other inactive Service Tax registrations of the party with corroborative documentary evidence and also as to whether the said two registrations were used by the parties for rendering any taxable services.

3.3 That in this regard of the contention of the parties that d