Service Tax Can’t Be Levied Solely on Form 26AS Entries Without Proving Taxable Service: Gauhati HC

Green Valley Diagnostics & Hospitals Pvt. Ltd. Vs Union of India (Gauhati High Court)

The petition concerned a private limited company operating a diagnostic centre and hospital, engaged solely in providing healthcare services through its clinical establishment. It had voluntarily obtained service tax registration, but did not file ST-3 returns on the basis that the services it rendered were exempt from service tax under Notification No. 25/2012-Service Tax dated 20.06.2012, and that exempt service providers were relaxed from filing returns under Circular No. 97/8/2007 dated 23.08.2007.

A show cause notice dated 17.09.2020 was issued alleging suppression of taxable value during FY 2014-15 to 2017-18, non-filing of ST-3 returns, and short payment of service tax amounting to ₹10.13 crore. The demand was based on third-party data received from the Income Tax Department, particularly Form 26AS and financial statements, which reflected receipts on which tax had been deducted at source. The Department treated the receipts as consideration for taxable services and invoked the extended limitation period under Section 73(1) of the Finance Act, 1994, along with interest and penalties.

In reply, the petitioner contended that the entire demand had been raised solely on the basis of Form 26AS and financial statements without examining the nature of the transactions or considering statutory exemptions. It asserted that the receipts represented healthcare services provided to patients, employees of corporate entities under healthcare arrangements, and policyholders under cashless treatment arrangements with insurance companies. These services, it argued, were exempt healthcare services rendered by a clinical establishment under Clause 2 of Notification No. 25/2012. The petitioner also submitted agreements and documentary material supporting the exempt nature of the receipts.

It was further explained that certain amounts included in the Department’s computation were not taxable receipts at all. Interest income earned on bank deposits was claimed to fall within the negative list. Director remuneration and legal expenses were stated to be expenses of the company, not consideration received for taxable services. The petitioner also challenged the computation of taxable turnover and denied any fraud, suppression, or wilful misstatement necessary to invoke the extended period of limitation.

Despite these submissions, the adjudicating authority confirmed the entire demand, interest, and penalties. It reasoned that the petitioner had failed to file ST-3 returns, failed to establish correlation between receipts reflected in Form 26AS and supporting documents, and had not clearly shown whether it rendered any taxable services during the relevant period. It therefore treated the receipts as taxable and held that the extended limitation period was invocable.

The High Court examined whether service tax liability could be determined solely from Form 26AS data. Referring to settled principles, it held that tax liability must arise from the charging provisions of the statute and cannot be imposed merely by inference or analogy. Before assessment, there must first be a legally established liability to tax under the relevant law. The mere fact that receipts appear in Form 26AS or that income tax has been deducted at source does not automatically establish service tax liability, particularly where exemptions may apply or where the nature of the receipt has not been examined.

The Court noted that healthcare services provided by a clinical establishment were specifically exempt under Notification No. 25/2012, and the petitioner had consistently asserted that its activities fell squarely within that exemption. It also found that the authorities had proceeded on the basis of financial data without first determining whether the receipts related to taxable services under the Finance Act, 1994. This approach was held to be contrary to the statutory scheme and the governing legal principles on tax liability.

On limitation, the Court held that invocation of the extended period under Section 73 required a clear finding of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax. Mere non-filing of returns or omission to disclose information does not amount to suppression unless accompanied by deliberate intent to evade payment. The Court found no conclusive finding in the adjudication order establishing the statutory conditions necessary for invoking the extended period. In the absence of such findings, the assumption of jurisdiction under the proviso to Section 73(1) was held to be unauthorized.

Accordingly, the Court held that the demand and adjudication order were contrary to law and unsustainable.

FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT

The Petitioner is a private limited company incorporated in the year 2002 and is engaged for providing health care services from its Diagnostic Centre and Hospital situated at Dibrugarh City and known for its excellence in providing world class medical services. The Petitioner has no other activities either in the form of business or any other services except the said healthcare and medical services in its Diagnostic Centre and Hospital. Since the inception in the year 2002, the Petitioner was engaged in the business of providing healthcare services through its clinical establishment. Though the Petitioner Company was not liable to pay service tax, in view of specific exemption granted under a under specific Notification No. 25/2012-Service Tax dated20.06.2012 issued by the Ministry of Finance, Government of India, however the Petitioner, as a bonafide service provider, voluntarily got itself registered under the Service Tax vide a Service Tax Code (Registration No.) AABCG9212ESD0001 as it was engaged in providing health care services. The Petitioner was registered, since the service provided by the Petitioner was specifically exempted from payment of service tax, the Petitioner did not file its return as required under Section 70 of the Finance Act, 1994 as the Petitioner was not liable to file the same for providing such exempted services in view of the specific relaxation granted under Clause 6.1 of the Circular No. 97/8/2007 issued under F. No.137/85/2007-CX.4 dated 23.08.2007 by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, Government of India. During the relevant Assessment years also i.e. 2014-15 to 2017-18, the Petitioner was continuing in providing health care services without making payment of any service tax as the same was declared to be exempted services under the said Notification No. 25/2012 — Service Tax dated 20.06.2012 issued by the Ministry of Finance, Government of India and did not file its return in view of relaxation granted vide Circular No. 97/8/2007 issued under F. No. 137/85/2007-CX.4 dated 23.08.2007.

2. A Show Cause Notice was served on the Petitioner dated 17.09.2020 by the Commissioner, Central Goods & Service Tax, Dibrugah alleging that the Petitioner had suppressed the actual value of services provided during the financial year 2014-15 to 2017-18 and did not disclose its liability of service tax by filing itsST-3 returns for the financial year 2014-15 to 2017-18 and has consequently short paid its service tax dues to the tune of Rs. 10,13,56,425/- in violation of Sections 66, 66B, 67, 68 and 70 of the Finance Act, 1994 read with Rule 6 and 7 of the Service Tax Rules, 1994. It was also alleged that from the third party data provided by the Income Tax Department, it appears that the Petitioner received consideration for providing taxable services and made required declaration under various sections of the Income Tax Act, 1961 related to provision of services and TDS deductions which were duly reflected in its Income Tax returns but did not declare these receipts against ‘services’ by filing its periodic ST-3 returns for the year 2014-15 to 2017-18 which resulted in non-payment/ short payment of service tax. It was also alleged in the said Show Cause Notice dated 17.09.2020 that from the information received from the Income Tax Department, it was found that during the Financial Year 2014-15 to 2017-18, the Petitioner suppressed taxable value amounting to Rs. 71,04,86,443/-and on such value of services, Service Tax amounting to Rs. 10,13,56,425/- was required to be paid by the Petitioner to the Government exchequer which the Petitioner did not pay with intent to evade service tax 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. The Petitioner was, therefore, called up for show cause as to why service tax amounting to Rs. 10,13,56,425/- for the Period from 2014-15 to 2017-18 should not be demanded and recovered from it under proviso to Section 73(1) of the Finance Act, 1994 read with Section 142(8)(a) of the Central GST Act, 2017 with applicable interest under Section 75 and imposition of penalty under Section 70, 76 and 78 of the Act.

3. In response to the aforesaid Show Cause Notice dated 17.09.2020, the Petitioner filed a detailed Reply on 06.01.2021. In the said Reply, the Petitioner made its submissions in 9 broad categories which are as follows:

A. The impugned Show Cause Notice dated 17.09.2020 is vague, arbitrary and based on assumptions and presumptions and therefore, the proposed demand is liable to be dropped.

B. Demand based solely on the income tax returns and financial statement was unsustainable.

C. The services provided by the Noticee are exempted under Notification No. 25/2012 – Central Excise dated 20.06.2012.

D. No service tax is leviable on director’s remuneration paid by the Noticee to its Directors.

E. The Revenue from other operating income is not leviable to services tax.

F. The legal expenses are not leviable to Service Tax.

G. The Computation of Demand is incorrect.

H. Entire demand is time barred invokable, and Extended period is not.

I. Interest not chargeable and penalty not imposed.

4. The Petitioner categorically submitted before the Commissioner of Central Goods & Service Tax that the entire demand has been raised solely on the basis of Form 26 AS and the financial statements without analysing the nature of transactions undertaken by the Petitioner, commenting on its taxability or being covered/ not covered by the exemption notification. It was therefore submitted that the impugned demand that has been raised solely on the figures as reflected in Form 26 AS and financial statements of the Petitioner is liable to be dropped.

5. The learned senior counsel for the Petitioner submits that the Petitioner was a hospital and was engaged in providing various health care services which was exempted under the Notification No. 25/2012 Service Tax dated 20.06.2012 and therefore services provided by the Petitioner were exempted under the said Notification dated 20.06.2012 and accordingly the Petitioner was not liable to pay any service tax. It was further submitted that the Petitioner had entered into agreements with various corporates to provide health care services to their employees and consequently when the employees were admitted to the Petitioner’s hospital for treatment, the employees were treated and the medical expenses were claimed from the employer company. The Petitioner also entered into agreements with various health insurance companies to provide cashless health care services to its patients, payments of which were cleared by the said insurance companies at a later stage. The Petitioner produced all the said agreements executed with such corporate and insurance companies in support of its submissions along with its written reply dated 06.01.2021.

6. In reply to the show cause notice, the Petitioner further submitted that the remuneration to the Directors and payments made towards legal expenses were not the receipts of the Petitioner Company against any taxable service provided by the Petitioner Company but the expenses of the Petitioner Company and the same cannot be treated to be a ‘taxable service’ of the Petitioner Company under the provisions of the Finance Act, 1994. It was contended that the other income which was included by the Respondent No. 3 in computing the total taxable income of the Petitioner Company was only interest income from banks earned on the deposits made in the banks by the Petitioner Company which was also not taxable in view of its specific entry in the ‘Negative List’ attached to the Finance Act, 1994.

7. The learned senior counsel for the Petitioner further submitted that Respondent Authorities had considered the receipt of Financial Year 2014-15 to 2017-18 while arriving at the gross taxable value of the Petitioner and therefore the gross taxable value pertaining to the period from April 2014 to September 2014 and from July 2017 to March 2018 were beyond the disputed period and must not be considered while arriving at the gross total turnover. Therefore it was submitted that the gross taxable turnover was wrongly computed and the same is not tenable in the eye of law. The Petitioner also submitted various documents in support of his submissions made therein including all agreements with the Agencies from which receipts were drawn, Form 26 AS showing TDS and receipts for the year 2014-15 to 2017-18 maintained with the Income Tax Department,IT Return and financial statements filed before Income Tax Department by the Petitioner Company. In the reply, the Petitioner further submitted that the Invocation of extended period of limitation, in initiating the proceeding was not proper as the preconditions prescribed herein under the proviso to Section 73(1) was absolutely absent. There was no fraud or collusion or willful mis­statement or suppression of facts of contravention of any of the provisions of the Act with the intent to evade payment of tax resulting short levied or short paid by the Petitioner against the receipts declared and shown to the Income Tax Department by the Petitioner and there was no service tax liabilities against such receipts which were exempted under Notification No. 25/2012 – Service Tax dated 20.06.2012 during the year 2014-15 to 2017-18 by the Petitioner Company. Therefore, invocation of extended period of limitation under the proviso to Section 73(1) in the instant case was absolutely illegal not tenable in the eye of law and therefore it was sincerely requested before the said Commissioner of Central Goods & Service Tax to recall the said Demand -cum-Show Cause Notice dated 17.09.2020 which was issued by invoking the extended period of limitation under Section 73(1) of the Act. With regard to the levy of interest and penalty, the Petitioner submitted that the said levy was not proper as there was no mens rea on the part of the Petitioner as the Petitioner Company was under a bonafide belief that that no service tax was payable on the health care services as the same was exempted by virtue of the mega exemption Notification No. 25/2012-Service Tax dated 20.06.2012.  The Petitioner submitted that it cannot be said that there has been a willful suppression of facts by the Petitioner and since no tax is payable by the Petitioner post Notification dated 20.06.2012 therefore no interest can be validly levied when levy, itself was exempted. The Petitioner submitted that it cannot be held that the Petitioner had contravened the provisions of the Act or Rules, much less with intent to evade tax and non-payment of service tax on the part of the Petitioner, if any, was bonafide in view of the specific exemption granted under Notification No. 25/2012-Service Tax dated 20.06.2012 and as such no penalty can be imposed against such liability free assessee and that penalty cannot be imposed unless an assessee has acted in deliberate defiance of law. It is further contented that it cannot be issued in cases where an assesse has acted in a bonafide manner. The learned senior counsel for the Petitioner referred to the provisions of Section 80 of the Finance Act, 1994 which specifically provided that penalty should not be imposed in certain cases and since the Petitioner acted bonafidely all throughout and there was no prejudice caused to the Department as no tax was leviable upon the Petitioner as the services provided by the Petitioner were specifically exempted under a specific Notification of the Government of India, the Petitioner was entitled for the benefits under Section 80 of the Act and as such no penalty is imposable upon the Petitioner for anything caused under a bonafide belief. In the reply, the Petitioner has also relied upon the various pronouncements of the Apex Court and various High Courts of the country. A date of hearing was fixed and the petitioner appearedon 07.12.2021 on virtual mode and reiterated the submission made in its reply to the show cause notice. The Principal Commissioner of Central Goods & Service Tax however did not consider any of the submissions made by the Petitioner and by order dated 25.03.2022 assessed an amount of Rs. 10,13,56,425/- as service tax payable by the Petitioner. In the said Order-in-Original dated 25.03.2022 the Principal Commissioner of Central Goods & Service Tax also confirmed the demand of service tax of the said amount of Rs. 10,13,56,425/- for the Financial Year 2014-15 to 2017-18 in terms of proviso to Section 73(2) of the Finance Act, 1994 and also imposed interest under Section 75 of the Act with an equal amount of penalty of Rs. 10,13,56,425/- under Section 78 besides imposing penalty of Rs. 1,20,000/- under Section 70 of the Act. While passing the said impugned Order-in-Original dated 25.03.2022, the Respondent No. 2 observed that from the submissions of the Petitioner it could not be understood whether they have provided other taxable services during the relevant period or not and the Petitioner also failed to establish correlation of the gross amounts credited in his Form 26 AS during the relevant period. The Principal Commissioner of Central Goods & Service Tax further observed that the Petitioner had not filed the periodical ST 3 Returns for the relevant period. Being a service tax assessee, it was the sole responsibility of the Petitioner to disclose the amount of taxable value rendered during the relevant period and claim exemption, if any, from payment of service tax under specific Service Tax notification applicable therein. Therefore the Respondent No. 2 held that the Petitioner had failed to comply with the statutory obligations prescribed in the Service Tax Acts & Rules made thereunder and the allegations made in the Demand cum-Show Cause Notice dated 17.09.2020 was confirmed and the Petitioner was liable to pay the entire demanded amount of Service Tax and Cess of Rs. 10,13,56,425/- for the period from 2014-15 (Oct-March) to 2017-18 (April – June).

8. The learned senior counsel for the petitioner submits that with regard to the invocation of extended period of limitation, the Principal Commissioner of Central Goods & Service Tax observed that the Petitioner suppressed the taxable value by not filing the ST-3 Returns and in the regime of self-assessment, since the onus lies on the party to declare the taxable value, applicable service tax in their periodical ST -3 Return, therefore the non-declaration of the taxable value by the Petitioner came to the knowledge of the Department only after receipt of information from other sources. The Principal Commissioner of Central Goods & Service Tax had it not been for the data received from the Income Tax Department, the suppression of the taxable value by the Petitioner would not have been detected and therefore the Petitioner willfully suppressed the taxable value with an intent to evade payment of Service Tax. Therefore it was held that the service tax not paid by the said Petitioner is recoverable by invoking extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. In the Order-in-Original, the Principal Commissioner of Central Goods & Service Tax did not consider any of the judicial pronouncement relied on by the Petitioner in support of its contention and took a contrary view to the law laid down by the Apex Court as well as the various High Courts of the Country. The Principal Commissioner of Central Goods & Service Tax while passing the order failed to consider that the demand which was raised on the Financial Statement furnished by the Income Tax Department but the said Financial Statements submitted to income tax department also included tax audit report wherein the Petitioner had very clearly mentioned its nature of business being “health care services” and the Commissioner blindly proceeded to demand service tax from the Petitioner without even analysing the nature of services provided by the Petitioner. The Principal Commissioner of Central Goods & Service Tax also failed to consider that the Petitioner mentioned its nature of business in the ITR submitted with the income tax department and the relevant information was contained in PART-A-GENERAL(2) under the schedule NATURE OF COMPANY AND ITS BUSINESS of the ITR-6, the requirement of ITR with regard to the trade name and nature of business or profession was clearly shown as Nursing home/ Healthcare services. However the Commissioner proceeded to demand service tax from the Petitioner without ever analysing the nature of services provided by the Petitioner. The Petitioner also mentioned its nature of business vide note no. 1 to the Notes to Financial Statements, and those financial statements were available on portal of ministry of corporate affairs i.e, mca2l.gov. which was in public domain and copy of the same was also submitted before Commissioner of Central Goods & Service Tax in response to his Show cause notice dated 17.09.2020 vide Reply dated 11.01.2021 wherein the Petitioner further declared that the company was primarily engaged in running of Nursing Home which was a health care services. Therefore such assessment made by the Principal Commissioner of Central Goods & Service Tax contrary to the all evidences produced by the Petitioner was contrary to the Notification No. 25/2012 Service Tax dated 20.06.2012 which is in complete violation of the established principles of law and therefore the said impugned Order-in-Original dated 25.03.2022 passed by the Principal Commissioner of Central Goods & Service Tax. The only reason assigned by the Principal Commissioner of Central Goods & Service Tax for levying the service tax was that from the submission of the Petitioner it could not be understood whether they have provided other taxable services during the relevant period or not and the Petitioner failed to establish correlation of the gross amounts credited in his Form 26 AS during the relevant period with the work orders/ Agreement/ Contract documents in relation to the Demand -cum-Show Cause Notice, supported by Payment Vouchers and other relevant documents. The learned senior counsel for the Petitioner submits that the Form 26AS is a Certificate of Tax Deduction at Source issued by the Income Tax Department showing the total amount of tax deducted at source under the Income Tax Act, 1961 against the total receipts during the relevant assessment year. In the present case the relevant ‘Form 26AS’ issued by the Income Tax Department clearly showed the details of the Agencies which made payments to the Petitioner with the amount of tax deducted at source. In the said Form 26AS, the various agencies which made payment to the Petitioner during the year 2014-15 to 2017-18, were all against the exempted services (health care services) and non-taxable under the Mega Notification No. 25/2012 (Service Tax) dated 20.06.2012 issued by the Central Board of Indirect Taxes & Customs, Department of Revenue, Ministry of Finance, Government of India. In support of the said claim of exemption, the Petitioner submitted various contract agreements executed with such agencies before the Principal Commissioner of Central Goods & Service Tax. However without considering such clear evidence of exempted services/ non-taxability of the receipts, the Principal Commissioner of Central Goods & Service Tax proceeded erroneously and levied service tax upon the entire receipts of exempted and non-taxable transaction under the said Notification No. 25/2012 (Service Tax) dated 20.06.2012 issued by the CBIC. Such action of the Principal Commissioner of Central Goods & Service Tax in levying service tax upon the entire receipts of the Petitioner without considering the receipts under exemption is absolutely illegal, without jurisdiction, not tenable in law and liable to be interfered with by this Court. The Central Government being satisfied that it is necessary in the public interest so to do exempted certain taxable services from the whole of the service tax leviable thereon under Section 66B of the Finance Act, 1994.

9. The learned Senior counsel for the petitioner submits that among various other services, health care services provided by a clinical establishment, an authorised medical practitioner or paramedics were also exempted under Clause 2 of thesaid Notification. The relevant portion of the said Notification including Clause 2 is extracted below:

“Notification No. 25/2012 – Service Tax dated 20th June 2012, as amended. Incorporating changes made till issuance of Notification No. 10/2017 – Service Tax dated 08.03.2017.

G.S.R. 467(E)- In exercise of the powers conferred by sub Section (1) of Section 93 of the Finance Act. 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of Notification number 12/2012Service Tax, dated the lth March, 2012, published in the Gazette of India, Extraordinary, part II, Section 3, Sub-Section (0 vide number G.S.R. 210 (E), dated the lth March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under Section 66B of the said Act, namely

1. *******

2. (i) Health care services by a clinical establishment, an authorised medical practitioner or para-Medics;

(ii) Services provided by way of transportation of a patient in an ambulance, other than those specified in (i) above;

2A. Services provided by ford blood banks by way of preservation of stem cells or any other service in relation to such preservation;

2B Services provided by operators of the Common Biomedical Waste Treatment Facility to a clinical establishment by way of treatment or disposal of biomedical waste or the process incidental thereto;

3**********

Therefore, it is seen that health care services rendered by a clinical establishment, an authorized medical practitioner or paramedics were exempted under Clause 2 of the said Notification dated 20.06.2012. The said Notification further provides the definition of ‘health care services’ under Clause 2(t) as follows:

“Clause 2 (t) “health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patients to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma:”

The learned senior counsel further contented that the “Clinical Establishment” has been defined under the definition Clause 2(i) of the Notification as follows:

“Clause 2(j) “clinical establishment means a hospital, nurshing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment of care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases’:

Therefore, it is clear that if any ‘health care services’ are provided by any ‘clinical establishment’ as defined under sub Clause (t) and (i) of Clause 2 of the Notification No. 25/2012 – Service Tax dated 20.06.2012, the same are exempted under Clause 2 of the said Notification dated 20.06.2012.

10. The learned senior counsel for the petitioner submits that during the relevant year 2014-15 to 2017-18, the Petitioner Company was providing health care services as defined under sub Clause (t) of the definition Clause 2 and such services were provided from its ‘clinical establishment’ i.e. Diagnostic centre and hospital as defined under sub-Clause i) of the definition Clause 2 and therefore the services provided by the Petitioner Company were exempted from service tax by virtue of Clause 2 of the Notification No. 25/2012-Service Tax dated 20.06.2012 and accordingly not liable to pay service tax. The services provided by the Petitioner Company to the employees of various corporate and patients were expressly exempted under the Notification No. 25/2012 (Service Tax) dated 20.06.2012 issued by the Central Board of Indirect Taxes & Customs. The various documents submitted by the Petitioners in response to the direction issued by the Commissioner of Central Goods & Service Tax clearly established that the services provided by the Petitioner Company were exempted under Clause 2 of the Notification No. 25/2012 (Service Tax) dated 20.06.2012 and therefore no tax is leviable thereon. However the Principal Commissioner of Central Goods & Service Tax rejected the said claim of the Petitioner only on the ground that from the submission of the Petitioner it could not be understood whether they have provided other taxable services during the relevant period or not and the Petitioner failed to establish correlation of the gross amounts credited in his Form 26 AS during the relevant period with the work orders/ Agreement/ Contract documents in relation to the Demand -cum-Show Cause Notice, supported by Payment Vouchers and other relevant documents. The services provided to various corporate and agencies during the relevant year 2014-15 to 2017-18 by the Petitioner Company and receipts thereon which are exempted under the Finance Act, 1994.

11. The learned senior counsel for the petitioner submits that the Petitioner Company provided ‘health care services’ under various agreements with such corporate and agencies which were exempted services under the said Notification No. 25/2012 – Service Tax dated 20.06.2012. Therefore the action of the Respondent Authorities more particularly the Commissioner of Central Goods & Service Tax in treating the entire receipts of the Petitioner to be taxable service even after producing all documentary evidence by the Petitioner showing it to be exempted services, is therefore absolutely illegal and without jurisdiction and contrary to the express provisions of scheme of the said Notification No. 25/2012 (Service Tax) dated 20.06.2012 issued by the Central Board of Indirect Taxes & Customs. The said action of the Principal Commissioner of Central Goods & Service Tax in treating the entire receipts of the Petitioner as ‘taxable service’ is therefore absolutely illegal, without jurisdiction, not tenable in law and therefore the impugned Order-in-Original dated 25.03.2022 passed by the Principal Commissioner of Central Goods & Service Tax is liable to be set aside and quashed.

12. The learned senior Counsel for the petitioner submits that while computing the total taxable income, the Principal Commissioner of Central Goods & Service Tax had also included an amount of Rs. 2,15,60,154/- treating the same to be the other income of the Petitioner Company. The petitioner states that the said amount was received by the Petitioner as interest from banks earned on the deposits made in the banks by the Petitioner Company which was also not taxable in view of its specific entry in the ‘Negative List’ attached to the Finance Act, 1994 at Entry No. (n) of Section 66 D. Therefore no service tax is leviable on bank interest received by the Petitioner and as such the impugned dated 25.03.2022 passed by the Principal Commissioner of Central Goods & Service Tax in levying service tax upon receipts of interest from bank against deposits made by the Petitioner Company is not tenable in law and liable to be set aside and quashed. While passing the impugned Order-in-Original dated 25.03.2022, the Principal Commissioner of Central Goods & Service Tax also included the amount paid as remuneration to the Directors of the Petitioner Company and also payments made towards legal expenses which are not the receipts against any services provided by the Petitioner but the expenses incurred and the same cannot be treated to be a ‘taxable service’ of the Petitioner Company under the provisions of the Finance Act, 1994. It is further submitted that the Directors are employees of the company who have been paid salaries and no services have been provided by these directors to the company on which service tax is payable. Therefore demand of service tax on the Director’s salary under reverse charge mechanism is grossly unsustainable and illegal and not tenable under the provisions of law.

13. The learned senior counsel for the petitioner further submits that regarding the levy of service tax on legal expenses incurred by the Petitioner Company, the said legal expenses pertained to municipal tax and its incidental expenses paid to the local authorities. The said tax has to be mandatorily paid by the Petitioner in order to operate the hospital. The Principal Commissioner of Central Goods & Service Tax while adjudicating the proceeding of the Petitioner Company grossly mislead and treated the said expenses incurred by the Petitioner Company on account of remuneration to the Directors and the legal expenses incurred and therefore in that view of the matter the impugned Order-in-Original dated 25.03.2022 passed by the Principal Commissioner of Central Goods & Service Tax is not tenable in law and liable to be set aside and quashed.

Being aggrieved, the present writ petition has been filed putting a challenge to impugned Demand cum show cause notice dated 17.09.2020 and the impugned Order-in-Original dated 25.03.2022.

14. The learned Senior counsel for the petitioner submits that for imposition of tax, there must be a declaration of liability under the statute and which the assessee is required to comply with. It is submitted that tax cannot be imposed on an analogy and inferences based on Form 26AS statement received from the Income Tax Department. In support of his contention, the learned Senior Counsel has pressed into service Judgment of the Apex Court rendered in Chatturam Horgram Ltd. Vs. Commissioner of Income Tax, reported in 1955 (2) SCR 290. It is submitted that in the said Judgment, the Apex Court by referring to a Judgment of the Federal Court held that there are three stages of imposition of taxes. There must be a declaration of liability which is the part of the statute which determines the liability in respect of the assessee, next there must be an assessment. The liability does not depend on the assessment it is already fixed under the statute but the assessment particularizes the exact sum which a person liable is required to pay and lastly there must be modes of recovery of tax, in the event the assessee who is taxed does not pay voluntarily.

15. The learned Senior counsel for the petitioner also presses into service the Judgment of the Apex Court rendered in V Fernandez Vs. State of Kerala, reported in (1957) 8 STC 561. It is submitted that before any assessment is made levying any tax there must be a liability to tax. If there is no liability to tax the question of making an assessment in respect of the same does not arise. In the present case, there was no liability to pay the taxes inasmuch as either the services liability to pay tax was on the recipient of the services on reverse charge basis and whichever tax was payable.

16. The learned Senior counsel submits that the Judgments of the Apex Court cited are subsequently followed in Commissioner of Income Tax Vs. Provident Investment Company Ltd. reported in (1957) 32 ITR 190. The learned Senior counsel also presses into service Judgments in support of his contention by referring to Venkateswara Stainless Steel and Wire Industries Vs. Union of India, reported in (1987) 27 ELT 648 and MIS IV.E Logistics &Anr. Vs. Union of India & 2 Ors. [W.P(C) No. 1870/2020]. It is submitted that in IV.E Logistics (Supra) , similar show cause notice was issued based on information collected from the Income Tax Department through Form 26AS. It is submitted that the High Court remanded the matter back to the authorities on the ground that the department had proceeded on a presumption that the assessee therein was liable to pay tax. It was held that the liability to pay tax of a service tax is not based on presumption nor can it be based upon the State of indeterminateness on the part of the authorities. Liability to pay the tax has to be conclusively determined for a given transaction for which the tax is imposed and for which the noticee has been held to be liable to pay tax as the same determination has not been made, the matter was remanded back to the Principal Commissioner, CGST for fresh determination and the assesses therein were given a opportunity to produce any relevant materials to show cause that the contract works for the service tax has been imposed for which the noticee is not liable to pay for such transaction.

17. It is submitted on behalf of the petitioner that by the said Judgment directed that after arriving at a conclusive determination reasoned order or a further demand notice as the case may be issued by the authorities. However, if on the other hand in the conclusion arrived at that the petitioner is not liable to pay service tax appropriate reason order is to be passed. It is submitted that the order has attained finality as no appeal has been preferred against the said Judgment.

18. The learned Senior Counsel for the petitioner also pressed into service Judgment rendered in Luit Developers Private Limited Vs. Commissioner of CGST & Central Excise, Dibrugarh (Service Tax Appeal No. 75792 of 2021) by the Customs, Excise & Service Tax Appellate Tribunal, Kolkata. While dealing with the imposition of service tax levied on the basis of entries in Form 26AS of the Income Tax Act. The Tribunal held that Form 26AS cannot be used to determine service tax liability unless there is any evidence shown that it was due to a taxable service. The Tribunal also came to the conclusion that there was no mala fide intention and therefore extended period of limitation cannot be invoked on the ground and service tax, interest and penalty was not sustainable and the same was accordingly set aside.

19. The learned Senior counsel for the petitioner submits that in the present case the Service Tax has been levied on the basis of the information reflected in the 26AS statement of the Income Tax. The 26AS statement only reflects the Income Tax deducted at source and the amount from which the said tax has been deducted. The said 26AS statement cannot determine the liability of the Service Tax of the petitioner inasmuch as only because Income Tax was deducted at source from certain receipts in respect of the various services rendered, it cannot be said that the said services were taxable under the Finance Act of 1994. A particular receipt on account of services rendered though may be liable to Income Tax under the Income Tax Act, 1961, the same may not be liable for payment of service tax because of the exemptions granted under the Finance Act of 1994, or because the liability for payment of service tax may have been fastened on the service recipient on reverse charge basis. As such the information contained in the 26AS statement cannot by any stretch of imagination be said to be indicative of the fact that the services in respect of which the amount was received and the income tax was deducted at source on the said receipt were also taxable under the Finance Act of 1994 and liable to Service Tax. The Adjudicating Authority simply on the basis of inferences and analogy levied Service Tax on the entire receipts as reflected in the 26AS statement without examining the fact as to whether those Services were liable to Service Tax under the Finance Act of 1994. Without undertaking such an exercise and examination, the Adjudicating Authority cannot levy the Service Tax on the said receipts as has been held by the Apex Court that Tax cannot be imposed on the basis of Inferences and analogy. Since in the present case the entire Service Tax liability has been imposed any on inferences and analogy without coming to a finding that the said services were liable to Service Tax under the Finance Act of 1994 the impugned Adjudication Order is absolutely illegal, without jurisdiction, and the same is liable to be set aside and quashed.

20. It is further submitted by Dr. Saraf, learned Senior Counsel that in the present case the adjudicating authority has levied service tax without examining the facts and without coming to a finding that the said services were taxable and simply on the basis of the information available in Form 26AS statement of the Income Tax, has levied the service tax on the entire amount received, on pure inferences and analogy which is not permissible in law, and thereby the said order passed by the adjudicating authority is absolutely illegal, without jurisdiction and the same is liable to be set aside and quashed.

21. The impugned order in original is further assailed on the ground that the extended period of limitation is illegal as there was no suppression, fraud, collusion or willful misstatement or suppression of facts or contravention of any of the provisions of the Act. Dr. Saraf, learned Senior counsel submits that Section 73 specifies recovery of service tax not levied or paid or short-levied or short paid or erroneously refunded and in such an event, the extended period of five (5) years is applicable. It is submitted that a section itself prescribes that the provisions of the section would be applicable for recovery of Service Tax not levied or paid or short levied or short paid or erroneously refunded by reasons of —

(a) Fraud; or

(b) Collusion; or

(c) Willful misstatement; or

(d) Suppression of facts; or

(e) Contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax.

22. It is submitted that for initiating any proceeding under Section 73 of the Act, there must be tax levied or paid or short-levied or short paid or erroneously refunded. Further the Notice has to be issued within a period of eighteen (18) months from the relevant date on the person chargeable with the service tax which has not been levied or paid or erroneously refunded. The Proviso to the said sub-section (1) also specifies that such notice can be issued within such extended period of five years only if such short-levy or short-payment or erroneous refunds were by reasons of fraud, collusion, willful misstatement, suppression of facts or contravention of any of the provisions of the Act or the Rules made thereunder with the interest to evade payment of tax.

23. It is submitted by the learned Senior counsel that assuming though not admitting that there was a failure to furnish correct information, however, the same does not constitute suppression unless the failure/omission to furnish information or failure to pay taxes are made willfully in order to evade payment of tax. In support of his contentions, the learned Senior counsel has referred to the Judgment of the Apex Court rendered in Continental Foundation Joint Venture Holding Vs. CCE, reported in (2007) 10 SCC 334. It is submitted that the Apex Court in the said Judgment held that mere omission to give correct information did not constitute suppression unless that omission was made willfully in order to evade duty. Suppression would mean failure to disclose full and true information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party would not constitute suppression. An incorrect statement cannot be equated with a willful mis-statement. The latter implies making of an incorrect statement with the knowledge that the statement made was not correct. It was further held therein that a mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment duty in order to evade duty.

24. Referring to the Judgment of Apex Court rendered in CCE Vs. Chemphar Drugs & Liniments, reported in (1989) 2 SCC 127 , the learned Senior Counsel, Dr Saraf, submits that the Apex Court while interpreting the provisions of Section 11A of the Central Sales Tax Act, 1944 held that something positive other than mere inaction or failure on the part of the manufacture or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability of invoking the extended period of limitation.

25. Reliance is also placed upon the Judgment of the Apex Court rendered in Cosmic Dye Chemical Vs. CCE., reported in (1995) 6 SCC 117, it is submitted that the Apex Court therein held that the words “contravention of an of the provisions of the Act or Rules” are qualified by the immediately following words “with intent to evade payment of duty”, and therefore it was not correct to say that there can be a suppression or misstatement of fact, which was not willful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. It is submitted that the law laid down by the Apex Court in this Judgment are squarely applicable in the present case inasmuch as there is no such finding the adjudicating authority while invoking the powers under Section 73 by invoking the extended period of limitation. It is submitted that the intent to evade payment of tax cannot be established by peering into the minds of the tax payer but has to be established through evaluation of the tax behavior.

26. Referring to the Judgments pressed into service in support of his contention, Dr. Saraf urges that from the law laid down by the Apex Court and referred to by him, it is clear that without examining the fact as to whether there was any suppression, mis-statement, fraud, collusion, or contravention of any of the provisions if the Act and the rules with the intent to evade payment of any tax, the Adjudicating Authority simply on the basis of the tax behavior has invoked the extended period of limitation without fulfilling the preconditions laid down in proviso to Section 73(1) of the Act and thereby the impugned show cause notice is clearly barred by limitation and consequently the impugned order in original as well as the show cause notice are liable to be set aside and quashed.

The learned Senior counsel therefore submits that the order-in-original has been passed by invoking extended period of limitation of five (5) years without providing any tangible evidence to show that any material fact or information was willfully suppressed from the Revenue with the intent to evade payment of any tax and thereby the issuance of the show cause notice itself is barred by the limitation and consequently the impugned show cause as well the order in original are liable to be set aside and/or quashed.

27. It is further submitted by the learned Senior counsel that if an authority while acting within its jurisdiction makes an error of law which is revealed on the face of its recorded determination, then the Court, in the exercise of its supervisory function, may correct the error unless there is some provision preventing a review by a Court of law. In support of his contentions, the learned Senior counsel refers to the Judgment rendered in Anisminic Ltd. Vs. Foreign Compensation Commission and another, reported in (1969) 2 WLR 163.Referring to the said Judgment, it is submitted that lack of jurisdiction may also arise if the authority in the intervening stage, while engaged on a proper enquiry, departs from the roots of natural Justice, or ask itself a wrong questions or takes into accounts matters which it was not directed to take into account. In such a situation it would amounts to a steps outside it jurisdiction.

28. The further limb of argument of the learned Senior Counsel for the petitioner is that the levy of interest in the instant case is absolutely illegal and without jurisdiction inasmuch as where service tax itself is not payable by the petitioner as the Petitioner also informed that the contracts undertaken by the Petitioner was exempted from payment of service tax under the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 w.e.f. 01.07.2012 as amended. It is submitted that in so far as the levy of the penalty is concerned, it is a settled law that in order to justify imposition of penalty the authority concerned must find out not only that there has been a default but should also consider the question whether there were good and sufficient reasons for the default and only when such grounds are available the authorities can proceed to impose penalty. Referring to the finding of the Adjudicating authority, it is submitted that it clear that the adjudicating authority has imposed penalty most mechanically without considering as to whether the assessee had acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. In support of his contention, the learned Senior counsel refers to the Judgments rendered in Hindustan Steel Ltd. Vs State of Orissa, reported in (1972) 83 ITR 26; B.D Khaitan Vs. Income Tax Officer, reported in (1978) 113 ITR 556 (Cal) and Brajalal Banik Vs. State of Tripura and Ors, reported in (1989) 2 GLR 220. Referring to the Judgments, the learned Senior Counsel submits that the adjudicating authority has not applied its mind to the facts and circumstances of the case but has acted mechanically while imposing penalty and the order does not contain any reason legally sustainable whatsoever as to why the officer concerned had decided to levy penalty and also why he has levied the maximum amount of penalty. It is submitted that the maximum amount of penalty cannot be imposed in all the cases inasmuch as the authority has to decide the relevant factors such as the period of delay conduct of dealer and such other considerations and the levy of maximum penalty without stating any reasons may not be sustainable. It is therefore submitted that the imposition of interest and penalty in the instant case is absolutely illegal without jurisdiction and thereby the same is liable to be set aside and quashed. Such a non-speaking order is not maintainable in law and same is liable to be set aside and quashed.

29. In so far as the question of maintainability of the writ petition is concerned in view of the statutory remedy of appeal being provided under the Act, the learned Senior counsel submits that the existence of other adequate legal remedy will not per se act a bar for issuance of a writ of certiorari and in an appropriate case it may issue prerogative writs. The duty of the superior Court to issue a writ of certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedies available to him and a Superior Court in a proper case exercise its jurisdiction in favour of a petitioner who has allowed the time to appeal to expire or has not preferred his appeal. It cannot then be laid down as an inflexible rule that the superior Court must deny the writ when an inferior Court or tribunal by discarding the principles of natural justice and all accepted principle of procedure arrive at a conclusion which shocks the sense of justice and fair play.

30. Referring to the Judgment of this Court rendered in Hardeodas Jagannath Vs. Income Tax Officer, reported in (1961) 47 ITR 56, it is submitted that there is no inflexible rule that the existence of an alternative remedy is a bar to the issue of a writ of certiorari. The issue of various writs or directions is in the discretion of the Court and the Court while exercising its jurisdiction may take into consideration the existence of an alternative remedy as a mater of policy, but the existence of an alternative remedy and it is not per so as bar to the issue of a writ of certiorari. It is submitted by the learned Senior counsel that this position laid down by the Assam High Court has also summarised by the Apex Court in the case of Hari Vishnu Kamath Vs. Ahmed Ishaque, reported in AIR 1955 SC 233.

31. Similar views have been laid down by the Apex Court in TELCO Vs Assistant Commissioner, reported in AIR 1967 SC 1401; State of U.P. Vs. Mohd. Nooh, reported in 1958 SCR 595; Bhopal Sugar Industries Vs. D.P. Dubey, reported in AIR 1967 SC 549and Altafur Rahman Vs. Union of India, reported in (1986) 1 GLR 14.

32. The learned Senior Counsel submits that a very recent decision of the Apex Court consistently has held that exhaustion of alternative remedy is not an inflexible rule. Where the Court finds that there has been violation of natural justice or the invocation of the jurisdiction itself is contrary to the provision of law, a writ Court is not denuded of it’s powers to invoke the prerogative writs notwithstanding the availability of statutory alternative remedy.

33. The learned Senior counsel for the petitioner further fortifies his submissions by referring to the Judgments of the Apex Court rendered in Whir/pool Corporation Vs. Registration of Trade Mark, reported in (1998) 8 SCC 1; Union of India Vs. Parashotam Dass, reported in 2023 SCCOnline SC 314; State of Tripura Vs. Monoranjan Chakraborty, reported in (2001) 10 SCC 740; Assistant Commissioner of State Taxes Vs. Commercial Steel Co. Ltd., reported in 2021 SCCOnline SC 884 and Godrej Sara Lee Vs. Com. Assessing Officer, reported in 2023 SCCOnline SC 9695.

34. The learned Senior counsel therefore submits that the writ petition be allowed. The impugned order-in-original be interfered with and set aside interfering with the demand of service tax as well as the imposition of penalty imposed on the writ petitioner.

35. Mr. S.0 Keyal, learned counsel appearing for the Respondents has strongly disputed the contentions made on behalf of the writ petitioner. On the question of maintainability of the writ petition, it is submitted that where there is elaborately prescribed statutory provisions providing for alternative remedy, the petitioner assesseeshould not be permitted to invoke the writ jurisdiction without first availing of the statutory prescribed remedies. The GST is a complete code in itself and elaborate provisions are prescribed for ventilating grievances of the assesses who are aggrieved by any orders passed by the GST authorities. Therefore the writ petition should be dismissed and the petitioner should be relegated to avail of the statutory alternative remedies prescribed. Unless the petitioner had availed of these remedies, there is no scope for entertaining the instant writ petition. Therefore, since the petitioners did not avail statutory remedy, the petition should be dismissed on this limited ground and the parties be relegated to the avail of the statutory remedy prescribed. In support of his contentions, the learned counsel for the respondent relies upon the following Judgments:

1. GNRC Limited Vs. Union of India, reported in 2024 0 Supreme (Gau) 973;

2. PHR Invent Educational Society Vs. UCO Bank and Ors, reported in 2024 0 Supreme SC 333;

3. Brahmaputra Television Network Vs. Union of India, reported in 2024 0 Supreme (Gau) 855

4. M/S Sailaja Commercial Construction Pvt. Ltd. Vs Union of India & Ors, (W.A. No. 188/2022)

5. Bekem Infra Projects Ltd Vs. Deputy Commissioner of State Tax, [SLP(C) No. 27712/2024];

6. Sanjib Das Vs. Union of India, reported in 2022 0 Supreme (Gau) 284;

7. Sum/ Gulati Vs. Additional Commissioner, CGST, Delhi South Commissioner &Anr. [W.P(C) No. 4383/2025];

8. M/S Vishwanath Traders Vs. Union of India and Ors [SLP(C) No. 15594/2023];

9. Union of India and Ors. Vs. Coastal Container Transpiration Association and ors, reported in 2019 0 Supreme (SC) 215.

36. The respondents refer to the judgment of rendered in GNRC Limited vs Union of India reported in (2024) 0 Supreme (Gau) 973. The learned counsel for the respondents also pressed into service the judgment rendered in PHR Invent Educational Society Vs. UCO Bank and Ors, reported in 2024 0 Supreme SC 333. Pressing these judgments into service, the learned counsel for the respondents submit that in the face of well anointed procedures prescribed under the GST providing for appeals, the petitioner should be relegated for filing appeal before the appropriate authority.

37. Heard learned counsel for the parties. Pleadings available on records have been carefully perused as also the demand made by the show cause notice which ultimately came to be confirmed by the impugned order in original which is the issue in the present proceedings has been assailed primarily on two grounds.

38. The first ground urged before this Court by the writ petitioner assessee is that there were no dues of service tax payable by the petitioner in respect of the services rendered.

39. Upon a perusal of the pleadings available before the Court, it is seen that the service tax liability of services by the petitioner was stated that the contracts undertaken by the Petitioner were pertaining to Health care service and the same was exempted from payment of service tax under the Mega Exemption Notification No. 25/2012 S.T. dated 20.06.2012 w.e.f. 01.07.2012 as amended.

40. In this context a reference to the Notification No. 25/2012-Service Tax dated 20.06.2012 as amended, in exercise of powers conferred on it by Sub-section (1) of Section 93 of the Finance Act, 1994 notified certain exemptions of the taxable services from the whole of the service tax leviable thereon under Section 66B of the said Act.

41. The first limb of argument by the learned Senior counsel for the petitioner before this Court is imposition of tax on solely on the basis of data available in Form 26AS which is obtained from the Income Tax Department. In ChatturamHollram Ltd (Supra) , the Apex Court held that there are three stages in the imposition of tax. There has to be a declaration of liability, which is the part of the statute which determines what persons in respect of what property are liable to pay the tax. Then there has to the assessment. The liability to pay taxes does not depend on the assessment which has already been fixed by the statute. But the assessment specifies the exact sum which a person is found to be liable to pay and finally the modes of recovery of taxes which are assessed in the event the assessee refuses to pay voluntarily. The relevant paragraphs of this Judgments are extracted below:

‘As has been pointed out by the Federal Court in Chatturam Vs. Commissioner of Income-tax, Bihar [(1947) F.C.R. 116 at 126; 15 ITR 302, at 302] (quoting from the judgment of Lord Dunedin in Whitney Vs. Commissioners of Inland Revenue [(1926) A.C. 37] ‘there are three stages in the imposition of a tax. There is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex-hypothesi, has already been fixed. But assessment particularses the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay”

42. Again in A.V Fernandez Vs. State of Kerala, reported in (1957) 8 STC 561, the Apex Court held that the three stages in the imposition of tax which are laid down predicate, in the first instance, a declaration of liability as the starting point. If there is a liability to pay tax which is imposed in terms of the taxing statute, then the provisions with regard to the assessment of such liability is to be followed. If there is no liability to tax there cannot be any assessment either. Sales or purchases in respect of which there is no liability to tax imposed by the statute cannot at all be included in the calculation of turnover for the purpose of assessment and the exact sum which the dealer is liable to pay must be ascertained without any reference whatever to the same.

It was further held that if under the statute, it is found that the assessee is not liable to tax, no tax can be levied or imposed on them and they do not come under the purview of such a statute. The Apex Court went on to hold that no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. It was held that regard must be had to the actual provision of the Act and the Rules made thereunder before any conclusion can be arrived at that the assessee is liable to assessment as contended by the revenue authorities. The relevant provisions this Act are extracted below:

“The three stages in the imposition of a tax which are laid down here predicate, in the first instance, a declaration of liability as the starting point. If there is a liability to tax, imposed under the terms of the taxing statute, then follow the provisions in regard to the assessment of such liability. If there is no liability to tax there cannot be any assessment either. Sales or purchases in respect of which there is no liability to tax imposed by the statute cannot at all be included in the calculation of turnover for the purpose of assessment and the exact sum which the dealer is liable to pay must be ascertained without any reference whatever to the same.

The legislature cannot enact a law imposing or authorizing the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all. The very fact of their non-liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed.

It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the Sales Tax Authorities.”

43. Therefore, under such circumstances, this Court is of the considered view that the determination made by the respondent authorities by issuing the demand cum show cause notice and the confirmation in the impugned order-in-original is contrary to the provisions of the Act and the law declared by the Apex Court as well as by the High Court. The impugned order-in-original is therefore is bad and the same is liable to set aside.

44. Coming to the question of the invocation of the extended period of limitation, it is necessary to refer to the provisions of Section 73 of the Finance Act, the same is extracted below:

Section 73: – Recovery of Service tax not levied or paid or short-levied or short-paid or erroneously refunded.-

73 (1) where any service tax has not been levied or paid or short -levied or short-paid or erroneously refunded, the Central Excise Officer may, within eighteen months from the relevant date serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the persons to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;

Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of-

(a) fraud; or

(b) collusion; or

(c) willful misstatement ;or

(d) suppression of facts; or

(e) contravention of any of the provisions of this chapter or of the rules made there under with intent to evade payment of service tax,

by the person chargeable with the service tax or his agent the provisions of this sub-section shall have effect, as if for the words eighteen months, the words “five years” had been substituted.

Explanation-where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of eighteen months or five years as the case may be.

(1A) Notwithstanding anything contained in sub-section (1), the Central Excise Officer may serve, subsequent to any notice or notices served under that sub-section, a statement, containing the details of service tax not levied or paid or short levied or short paid or erroneously refunded for the subsequent period, on the person chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices

(2) The Central Excise Officer shall after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined.

(3)………………

45. A perusal of the Section 73 of the Finance Act reveals that the extended period in respect of recovery of service tax not levied or paid or short levied or short paid or erroneously refunded can be invoked only when any or more of the conditions prescribed under the proviso to the said section is present. Under the proviso to the said section, there are five situations when the extended period of limitation can be invoked. These are:

(a) Fraud; or

(b) Collusion; or

(c) Willful misstatement; or

(d) Suppression of facts; or

(e) Contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax.

46. It is only in the event that any or more of these conditions are found to be applicable in the facts and circumstances of the case that the provisions for extension of limitation under Section 73 can be invoked. In the event, it is invoked a notice has to be issued within a period of 18 months from the relevant date on the person chargeable with service tax.

47. In this context, it is necessary to refer to the case laws cited before this Court. In Continental Foundation Joint Venture Holding (Supra), the extended period of limitation under Section 11A of the Central Excise and Salt Act, 1944 was under consideration. The Apex Court held that mere omission to give correct information did not constitute suppression unless that omission was made willfully in order to evade duty. The Apex Court held that suppression would mean failure to disclose full and true information with the intent to evade payment of duty. When the facts are known to both the parties, omissions by one party would not constitute suppression. It was held that an incorrect statement cannot be equated with a willful mis-statement. The latter implies making of an incorrect statement with the knowledge that the statement made was not correct. The relevant paragraphs of the Judgment are extracted below:

12. The expression “suppression” has been used in the proviso to Section 11-A of the Act accompanied by very strong words as “fraud” or “collusion” and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop (sic evade) the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11-A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct.

48. In CEE Vs Chemphar Drugs & Liniments (Supra), while interpreting provisions of Section 11A of the Act of 1944, the Apex Court held that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise is required, before it is saddled with any liability, before (sic beyond) the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or willful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case.

49. In Cosmic Dye Chemical (Supra), the Apex Court again while examining Section 11 A of the Act of 1944 held that the emphasis is on the requisite intent i.e the intent to evade payment of duty which is built into the very works of section. The Apex Court held that even misstatement or suppression of fact are clearly qualified by the words “willful” preceeding the words “misstatement or suppression of facts” which means with intent to evade duty. The Apex Court therefore held that it will not be correct to say that there can be a suppression or misstatement of fact, which is not willful and yet constitutes a permissible ground for the purpose of the provisio to Section 11-A. Misstatement or suppression of fact must be willful. The relevant paragraph is extracted below:

“6. Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as misstatement or suppression of facts are concerned, they are dearly qualified by the word ‘wilful’ preceding the words “misstatement or suppression of facts” which means with intent to evade duty. The next set of words “contravention of any of the provisions of this Act or rules” are again qualified by the immediately following words “with intent to evade payment of duty”. It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11-A. Misstatement or suppression of fact must be wilful.

50. Coming to the fact and the present proceedings from the recital of the impugned order-in-original, it is seen that the petitioner had suppressed the material facts to the department wilfully by not filing the prescribed ST-3 returns during the period and by way of providing taxable services without discharging services tax liabilities with the intent to evade payment of service tax and therefore the extended period under Section 73 (1) of the Finance Act is invocable. The petitioner also violated the provisions of Sections 66, 66B, 67, 68 and 70 of the Finance Act, 1994 read with Rules 6 and 7 of the Service Tax Rules, 1994 and thus evaded payment of service tax amounting to Rs. 10,13,56,425/- including Ed. Cess, S&HE Cess, Krishi Kalyan Cess and Swachh Bharat Cess. Therefore, assessing authority found that the petitioner did not declare the correct value of taxable service in the ST-3 returns as per their book of accounts.

51. Such conclusions as have been discussed above are contrary to the facts which are evident from the pleadings. In any view of the matter for invocation of the provisions of Section 73 for extension of the period of limitation, it must necessarily be a case which falls under any or all the conditions specified under the proviso to Section 73(1) of the CGST Act. From a plain reading of the impugned Order-in-Original, it is evident that there is no finding by the Adjudicating Authority that the case of the petitioner can be considered to be a case which falls under the conditions specified in proviso to Section 73(1). Under such circumstances, the impugned Order-in-Original appears to the Court to have been assumption of jurisdiction by the revenue authorities which was not otherwise vested on the said authority. For the revenue authorities to invoke powers under Section 73(1), there must be a finding and a conclusion arrived at based on the facts of the case that the petitioner assessee had willfully and deliberately resorted to fraud, collusion, willful misstatement, suppression of facts of contravention of any of the provision thereunder with the intent to evade payment of service tax. Therefore, for invocation of the powers proviso to Section 73(1), there must be a conclusive finding arrived at by the Revenue authorities that the petitioner assessee had resorted to any or all for these acts or omissions with the sole intention to evade payment of service tax. Such finding is not discernable from the impugned Order-in-Original passed by the Revenue Authorities. Therefore, the assumption of jurisdiction of the Revenue under the proviso to Section 73(1) has to be concluded to be a jurisdiction assumed by the Revenue authorities not vested on it by the statute. Such assumption of jurisdiction therefore, being contrary to the provisions of the statute itself, the same is colourable and therefore it is held to be unauthorized.

52. Where a subordinate Tribunal and an authority is found to have assumed jurisdiction not vested on it a superior Court may invoke its extraordinary jurisdiction to correct such errors which were exercises by the authorities. The powers of a superior Court to examine the authority assumed by a Tribunal was the issue in Anism 1″nic Ltd (Supra). It was held therein that the jurisdiction of the superior Court is to see that the inferior court has not exceeded its own, and for that very reason it is bound not to interfere in what has been done within that jurisdiction, for in so doing it would itself, in turn, transgress the limits within which its own jurisdiction of supervision, not of review, is confined. That supervision goes to two points: one is the area of the inferior jurisdiction and the qualification and conditions of its exercise; the other is the observance of the law in the course of its exercise. If, therefore, a tribunal while within the area of its jurisdiction committed some error of law and if such error was made apparent in the determination itself (or, as it is often expressed, on the face of the record) then the superior court would certainly be competent correct that error unless it was otherwise forbidden to do so under the statute. It would be so forbidden if the determination was “not to be called in question in any court of law”. If so forbidden it could not then even hear argument which suggested that error of law had been made. It could, however, still consider whether the determination was within “the area of the inferior jurisdiction.

By referring to Reg. Vs. Cotham, reported in (1898) 1 Q.B. 802, 808, it was noted that the distinction between, on the one hand, disregarding the provisions of a statute and considering matters which ought not to be considered and, on the other hand, what is called “a mere misconstruction of an Act of Parliament”. This perhaps illustrates the clear distinction which exists between an error when in the exercise of jurisdiction and an error in deciding whether jurisdiction can be assumed: in the latter case an error may have the consequence that jurisdiction was lacking and was wrongly assumed and the result would be that any purported decision would have no validity.

The Court held that lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage, while engaged on a proper inquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into something not directed by Parliament and fail to make the inquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity.

53. Again in Bunbuty Vs. Fuller, reported in (1853) 9 Exch 111, 140 on the question of excessive jurisdiction of a Court of limited jurisdiction, it was held that no court of limited jurisdiction can give itself jurisdiction by a wrong decision on a point collateral to the merits of the case upon which the limit to its jurisdiction depends; and however its decision may be final on all particulars, making up together the subject matter which, if true, Is within its jurisdiction, and however necessary in many cases it may be for it to make a preliminary inquiry, whether some collateral matter be or be not within the limits, yet upon this preliminary question, its decision must always be open to inquiry in the superior court.

54. Again in Rex Vs. Shoreditch Assessment Committee, Ex parte Morgan, reported in (1910) 2 K.B. 859, it was held that no tribunal of inferior jurisdiction can by its own decision finally decide on the question of the existence or extent of such Jurisdiction: such question is always subject to review by the High Court, which does not permit the inferior tribunal either to usurp a jurisdiction which it does not possess, whether at all or to the extent claimed, or to refuse to exercise a jurisdiction which it has and ought to exercise. Subjection in this respect to the High Court is a necessary and inseparable incident to all tribunals of limited jurisdiction; for the existence of the limit necessitates an authority to determine and enforce it: it is a contradiction in terms to create a tribunal with limited Jurisdiction and unlimited power to determine such limit at its own will and pleasure — such a tribunal would be autocratic,not limited — and it is immaterial whether the decision of the inferior tribunal on the question of the existence or nonexistence of its own jurisdiction is founded on law or fact.

55. In Pilling Vs. Abergele Urban District Council, reported in (1950) 1KB 636, it was held that where a duty to determine a question is conferred on a authority which state their reason for the decision and the reasons which they state show that they have taken into account matters which they ought not to have taken into account or that they have failed to take matters into account which they ought to have taken into account, the court to which an appeal lies can and ought to adjudicate on the matter.

56. Similar views have been expressed by Courts in India and followed in several cases in the context of examination of jurisdiction vested on Tribunals and Court of limited jurisdiction. In Dhirajlal Girdharilal Vs. CIT, Bombay, reported in AIR 1955 SC 271, the Apex Court held that when a Court of fact acts on materials partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the Court was affected by the irrelevant materials used by it in arriving at its finding and such a finding is vitiated because of use of inadmissible material and thereby a question of law arises.

57. In Ram Avtar Sharma Vs. State of Haryana, reported in AIR 1985 SC 915, the Apex Court held that discretionary power must be exercised on relevant and not on irrelevant or extraneous considerations. It means that power must be exercised taking into account the considerations mentioned in the statute. If the statute mentions no such considerations, then the power is to be exercised on considerations relevant to the purpose of which it is conferred. On the other hand, if the authority concerned pays attention to, or takes into account, wholly irrelevant or extraneous circumstances, events or matters or considerations then the action taken by it is invalid and will be quashed.

58. In Jt. Reg., Co-operative Societies Vs. Rajagopal, reported in AIR 1970 SC 992, the Apex Court held that even though an authority may act in its subjective satisfaction, there must be cogent materials on which the authority has to form its opinion.

59. In Indian Railway Construction Co. Ltd. Vs. Ajay Kumar, reported in AIR 2003 SC 1843, the Apex Court held that in the purported exercise of its discretion, the authority conferred with discretion must not do what it has been forbidden to do, nor must it do what it has not been authorized to do. It must act in good faith, must have regard to all relevant considerations, must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter and to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously.

60. Again in Shalini Soni Vs. Union of India, reported in (1980) 4 SCC 544, it was held by the Apex Court that it is an unwritten rule of law, constitutional and administrative, that whenever a decision-making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote. Applying this principle in CIT Vs Mahindra & Mahindra, reported in (1983) 4 SCC 392, the Supreme Court quashed a decision under Section 72-A of the Income Tax Act, as the government was “clearly influenced by irrelevant and extraneous materials vitiating the impugned conclusion.

61. In S.R Venkataraman Vs. Union of India, reported in AIR 1979 SC 49, the Apex Court held that an administrative order which is based on reasons of facts which do not exist is infested with an abuse of power. There will be an error of fact when a public body is promoted by a mistaken belief in the existence of a non-existing fact or circumstance.

62. From a careful analysis of the judicial pronouncements as discussed above, it is clear that if an authority while making the inquiry rejects a consideration which is relevant and/or takes into consideration materials and other information which are not relevant, the said decision can be said to be a decision in excess or without jurisdiction. In the present case the adjudicating authority took into consideration the information available in form 26AS of the Income Tax Act, the sole basis for the purpose of levy of service tax. The authority did not consider the services rendered by the petitioner were exempted from levy of service tax or the liability to pay the service tax on the said services was on the recipient on the services. Since the adjudicating authority did not take into consideration those relevant materials which it was bound to take into consideration and on the other hand it had taken into consideration factors and materials, which if not irrelevant and not germane for deciding the liability of the service tax, cannot establish the liability of the assessee, then the said actions of the adjudicating authority is certainly without jurisdiction and/or is in excess of jurisdiction and thereby the impugned actions, orders and notices issued by the adjudicating authority are liable to interfered with by this Court in exercise of its extra ordinary jurisdiction under Article 226 of the Constitution of India.

63. Coming to the question of maintainability of the writ petition in view of the availability of statutory alternative remedy, the respondents have raised objections that whatever issues have been urged by the petitioner before this Court can very well be looked into by the appellate authority prescribed under the statute. Therefore, the question of exercise of prerogative writs by this court is not called for and the writ petition should be dismissed and the petitioners should be relegated to avail the statutory remedy. That

64. While the respondents are within their rights to raise their objections, time and again the question of issuance of prerogative writs even where statutory alternative remedies are available and/or are not availed of by the assessee, has come up before this Court as well as the Apex Court in a Catena judgments. The Assam High Court in Hardeodas Jagannath Vs. Income Tax Officer, reported in (1961) 47 ITR 56 had clearly held that there is no inflexible rule that the existence of an alternative remedy is a bar to the issue of writ of certiorari. The issuance of prerogative writs or directions is always to the discretion of the Court and the Court while exercising its discretion may take into consideration the existence of an alternative remedy as a matter of policy, but the existence of an alternative remedy is not per se a bar to the issue of writ of certiorari.

The High Court at Paragraph 42 held as under:

“42 No Tribunal and no Officer can confer jurisdiction or authority or competence upon itself or himself by misconstruing a section. An authority cannot claim to exercise jurisdiction by construing a section erroneously and thereby contending that the section so wrongly construed gives him the necessary power. In such a case, if the section has been wrongly construed, it would be a dear case of absence of jurisdiction apparent on the face of the record because the Court has got to look at the section and to decide whether the officer construing the section was in the right or in the wrong.”

65. The Apex Court in TELCO Vs. Assistant Commissioner, reported in AIR 1967 SC 1 401 held that though ordinarily High Court leaves an aggrieved party to take recourse to the remedies available under the ordinary law, if they are equally efficacious, yet there are certain exceptions and one of such exceptions pointed out is where action is being taken arbitrarily and without the sanction of law.

66. In State of U.P Vs. Mohd. Nooh, reported in 1958 SCR 595, the Apex Court held that the rule requiring the exhaustion of statutory remedies before the writ is granted is a rule of policy, convenience and discretion rather than rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies.

67. In Bhopal Sugar Industries Vs. D.P Dubey, reported in AIR 1967 SC 549, the Apex Court held that the High Court has undoubted jurisdiction to decide the writ application whether the taxing authority has arrogated to itself, powers which it does not posses or has committed serious errors of procedure which has affected the validity of the decision or where the taxing authority threatens to recover tax on an interpretation of the statute which is erroneous.

68. In Altafur Rahman Vs. Union of India, reported in (1986) 1 GLR 14, this Court held that when the challenges of the petitioner go to the root of the jurisdiction of the Controller and therefore the writ petition cannot be dismissed without disposing the contentions of the petitioner on merits.

69. In Whir/pool Corporation Vs. Registration of Trade Mark, reported in (1998) 8 SCC 1, the Apex Court on the question of alternative remedy held that exception on the existence whereof a Writ Court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute were laid document was the exceptional land document by the Apex Court were as under :

(i) where the writ petition seeks enforcement of any of the fundamental rights.

(ii) where there is violation of principles of natural justice;

(iii) Where the order or the proceedings are wholly without jurisdiction; or

(iv) Where the vires of an Act is challenged

70. In Godrej Sara Lee Ltd (Supra), the Apex Court held that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under Article 226 has not pursued, would not oust the jurisdiction of the High Court and render a writ petition “not maintainable”. The Court made it clear that availability of an alternative remedy does not operate as an absolute bar to the “maintainability” of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law. The Apex Court in further held that dismissal of a writ petition by a high court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper. The Apex Court further held that where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should be decided by the high court instead of dismissing the writ petition on the ground of an alternative remedy being available. The relevant paragraph is extracted below:

“9. Now, reverting to the facts of this appeal, we find that the appellant had claimed before the High Court that the suo motu revision/ power could not have been exercised by the Revisional Authority in view of the existing facts and circumstances leading to the only conclusion that the assessment orders were legally correct and that the final orders impugned in the writ petition were passed upon assuming a jurisdiction which the Revisional Authority did not possess. In fine, the orders impugned were passed wholly without jurisdiction. Since a jurisdictional issue was raised by the appellant in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu power, being a pure question of law, we are of the considered view that the plea raised in the writ petition did deserve a consideration on merits and the appellants writ petiton ought not to have been thrown out at the threshold.”

71. Again in Union of India Vs. Parashtom Dass, reported in 2023 SCCOnline SC 314, the Apex Court held that the provision of Article 226 of the Constitution forming part of the basic structure of the Constitution and that the self-restraint of the High Court under Article 226 of the Constitution is distinct from putting an embargo on the High Court in exercising this jurisdiction under Article 226 of the Constitution while judicially reviewing a decision arising from an order of the Tribunal. The relevant Paragraphs are extracted below:

‘A High Court Judge has immense experience. In any exercise of jurisdiction under Article 226, the High Courts are quite conscious of the scope and nature of jurisdiction, which in turn would depend on the nature of the matter.

We believe that there is no necessity to carve out certain case from the scope of judicial review under Article 226 of the Constitution, as was suggested by the learned Additional Solicitor General. It was enunciated in the Constitution Bench Judgment in S.N. Mukherjee case that even in respect of courts-martial, the High Court could grant appropriate relief in a certain scenario as envisaged therein, i.e., “if the said proceedings have resulted in denial of the fundamental rights guaranteed under Part III of the Constitution or if the said proceedings suffer from a jurisdictional error or any error of law apparent on the face of the record.”

There appears to be a misconception that the High Court would re-appreciate the evidence, thereby making it into a second appeal, etc. WE believe that the High Courts are quite conscious of the parameters within which the jurisdiction is to be exercised, and those principles, in turn, are also already enunciated by this Court “

72. From a careful analysis of the judgments discussed above, it is clear that the writ Court can interfere any arbitrary action notwithstanding the availability of alternative remedy when the authorities acts within jurisdiction or in exercise of jurisdiction or there is a procedural irregularity or were the order is high handed and is palpably illegal order in as much the same would amount to violation of Article 14 of the Constitution of India.

73. Although ordinarily it is the law enunciated by this court as well as by the Apex Court that an aggrieved assessee ought to avail of statutory remedies ascribed or prescribed under the statute, there is no quarrel on this principle of law. The GST is a complete code in itself providing for filing of returns, assessments, recovery as well as for appeals before the appropriate appellate authority. The facts involved in the present proceedings are however peculiar in essence that this show cause notice and the consequential confirmation of demand by the impugned order in original was a proceeding initiated by the respondent authority after invoking the extended period of limitation under Section 73(1). Therefore, in an ordinary course of proceedings seeking recovery of tax demanded, the normal course would be to avail of the statutory remedies. However, before the authorities invoke their jurisdiction under section 73(1), it is the mandate of the statute that the authorities must come to a specific conclusion that the jurisdiction conferred on the revenue authorities under Section 73 (1) can be invoked in the facts and circumstances of the present case. As have been elaborately discussed in the preceeding paragraphs that for invocation of jurisdiction under section 73(1), the respondent authorities must come to a conclusion that the invocation of the powers under section 73 (1) is necessary as the petitioner’s case falls under any of the conditions mentioned in the proviso to section 73(1) of the CGST Act. However, from the recital of the order impugned, it is seen that the primary reason for invoking the jurisdiction under section 73(1) is non furnishing of the required documents by the petitioner assessee to be full satisfaction of the respondent authorities. This mere non furnishing of documents or information in itself cannot be construed to have given rise to a situation under any or all of these five conditions under proviso to section 73(1) in order to levy service tax by extending limitation by the revenue authorities who have invoked this powers under section 73(1). Under such circumstances, ordinarily the revenue authorities could not have issued the impugned notice in demand followed by the order in original as it would have been hit by limitation. It is only by invocation of Section 73(1) under the GST Act that the revenue authorities have assumed powers for issuance of the show cause and the consequential confirmation by the impugned order in original by extension of the limitation. Therefore, the parameters prescribed under the proviso to section 73 (1) are to be scrupulously and diligently followed by the revenue authorities. It does not depend on the ipse debt of the revenue authorities. They must certainly arrive at a specific conclusion that the non-furnishing of documents leading to non-payment of GST is a deliberate and willful attempt by the petitioner assessee to evade from payment of the taxes due. The revenue authorities were within their rights to issue appropriate notices and carry out proceedings within the ordinary period of limitation prescribed, if it was their conclusion on due examination of the materials before them that there was any shortfall in the payment of GST and the same was required to be recovered. However, this process for demand and recovery was not initiated within the period of limitation ordinarily prescribed under the provisions of the Act. Therefore, the revenue authorities invoked the provisions under Section 73(1) to issue the demand cum show cause notice and the consequential impugned order in original confirming the demand and imposition of penalty and interest. It is the view of this Court that while demand and recovery of taxes as ordinarily prescribed under the provisions of the Act requires careful consideration of the facts and circumstances and satisfaction of all the parameters prescribed upon, the demand and recovery under the extended period of limitation under section 73(1) being an exception to the General Rule, requires a higher degree of responsibility and diligence on the part of the revenue authorities before they can proceed to invoke the powers conferred under section 73(1).

74. It is a trite law that greater the power prescribed under the statute greater will be the responsibility on the authorities on whom it has been bestowed to ensure that no infraction of the provisions of the Act and the Rules are made and no injustice is caused to the assessee during the process of demand and recovery. This Court while examining the facts and circumstances in minute detail and the exposition of the law laid down by various Courts including this Court as well as the Apex court of the country has held that for the Revenue authorities to invoke the powers under section 73(1), there must be a conclusive finding by the Revenue authorities that the petitioner assessee under the facts and circumstances, had wilfully and deliberately evaded or neglected to pay the GST. This conclusion by the Revenue authorities is not apparent and discernible from a plain reading of the impugned order in original. It is not a case that the petitioner assessee never responded to the notices. It is not a case that the documents which were called for required to be submitted were not furnished. The ST-3 Returns filed by the petitioner assessee were available in the records of the revenue authorities and which would have given a complete picture of the services rendered by petitioner assessee and/or whether such services come within the ambit of service taxes or are excluded by any circular or notification issue. However, there is no finding by the revenue authorities as to why this aspect was not examined. There is no conclusion of the revenue authorities in this aspect of the matter as is evident from the impugned order in original.

75. Therefore, under such circumstances the invocation of extended period of limitation under section 73(1) has been held by this Court to be invalid and contrary to the prescriptions mandated by law. This being a position, it is a clear case of assumption of jurisdiction by the Revenue authorities where the statutes did not confer them such jurisdiction by default. A Writ Court while exercising its powers under Article 226 can certainly examine whether the Tribunal or the quasi-judicial authority by exercising its jurisdiction mandated under the statute has fulfilled the necessary pre-conditions prescribed by the statute itself.

76. In the facts and circumstances of the case, this Court is of the considered view that such preconditions mandated by law under section 73(1) having not been fulfilled by the Revenue authorities, their assumption of jurisdiction under section 73(1) of the GST Act was completely unwarranted and revenue authorities could not have assumed the jurisdiction under section 73(1) unless these pre­conditions mandated and a conclusion thereto has been arrived at by the Revenue authorities before assumption of such jurisdiction. It is under these circumstances that notwithstanding the availability of statutory alternative remedy, this Court considers it an appropriate case to invoke its jurisdiction under Article 226 to interfere with the impugned order in original and to set aside and quash the order-in-original. Under these circumstances, the case laws referred to by the respondents will have no bearing in the facts and circumstances of the present proceedings. There is also no quarrel with the general proposition of law that in the face of statutory alternative remedy being available, a Writ Court would ordinarily not invoke its power of issuance of prerogative Writs. Since this Court has held that the levy of service tax on the petitioner by extending the limitation is contrary to the provisions of law, the natural corollary that would follow is that the levy of all penalty, surcharge and interest are also not leviable on the petitioner, this Court therefore issues a writ of certiorari setting aside the setting aside the impugned demand cum show cause notices and impugned order in original and it is ordered accordingly.

77. Therefore the writ petition stands accordingly allowed. However no order as to cost. Pending I.A.s are also dismissed and the interim order if any stands merged.