Wellworth Project Developers Private Limited Vs Commissioner of CGST (CESTAT Delhi)
CESTAT Delhi held that mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. The suppression has to be with an intent to evade payment of service tax. In absence of the same, extended period is not invokable.
Facts- The appellant is engaged in providing construction of commercial or industrial building services. It claims to have discharged service tax on this service. It is also in receipt of legal and professional services, and works contract service which are chargeable to service tax under reverse charge mechanism. The appellant claims that it discharged service tax liability on the advance receipts on account of construction services and on legal services under reverse charge mechanism. During the period 2013-14 to 2017-18, the appellant also gave corporate guarantees to various banks for credit facility sanctioned to associated enterprises.
A show cause notice dated 11.10.2019 was served upon the appellant demanding service tax of Rs. 2,40,96,546/-. The demand was confirmed vide the impugned order.
Conclusion- Held that in the present case, as noticed above, the show cause notice merely alleges that as the appellant did not disclose proper value of taxable services in the ST-3 returns, payment of service tax amounting to Rs. 2,40,96,546/- escaped assessment resulting in contravention of various provision of the Finance Act and the Rules with intention to evade payment of service tax. Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. The suppression has to be with an intent to evade payment of service tax and for this purpose the show cause notice must specifically allege why the assessee has suppressed facts with intent to evade payment of service tax. The Commissioner merely observed that show cause notice can be issued within five years from the relevant date if assessment was due to omission of failure on the part of an assessment to disclose wholly and truly all material facts required for verification of the self-assessment. The Commissioner completely misread the proviso to section 73(1) of the Finance Act. Though the normal period for issue of a show cause notice at the relevant time was thirty months, the extended period of limitation upto five years could have been invoked only if there was suppression of facts with a clear intention to evade payment of service tax. Mere suppression of facts would not result in invocation of the extended period of limitation.
