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TMI Blog2024 (7) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... der proviso to Section 73 (1) of the Act of 1994. It is not the case of the petitioner that he was not provided an opportunity to reply and so also it is not his case that he was not given a personal hearing or opportunity of hearing. The petitioner was asked to provide details with regard to why he has not registered under the service tax and not paid the service tax. It is apparently clear that once the show cause notice is issued under the proviso to Section 73 (1) of the erstwhile Finance Act, invoking the extended period of limitation beyond the 30 months and once an inquiry is conducted, opportunity is given to file reply when adjudication is held the grounds whatever urged by the petitioner herein would have to be challenged by way of an appeal provided under the Act of 1994, rather than challenging the jurisdiction of the revenue for issuance of the show cause notice - It cannot be said that the revenue does not have the jurisdiction to issue show cause notice under Section 73 (1) of the Act as it is not specified in detail with regard to the requirement under proviso to Section 73 (1) of the Act. As subsequently in the course of the show cause notice and the hearing, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 24.09.2019, and letter dated 06.11.2020, requested the petitioner to furnish the documents, explain the reasons for non-declaration of taxable services for the financial year 2015-16 for the amount of Rs. 65,09,825/-. The petitioner, vide letter dated 18.11.2021 replied by stating that he was involved in the drilling of bore wells for agricultural work and done the Government work to Government departments and hence was under the impression that he is exempted from service tax for agricultural sector, hence did not obtain service tax number and pay any service tax. Therefore he was not liable to pay the service tax. 5. Based on the reply, a personal hearing was held on 24.01.2023, an authorized representative on behalf of the petitioner appeared before the authorities, submitted the documents and took up the same contention that he was not liable for the service tax for the reasons as already mentioned hereinabove that he would fall under the category of negative list entry under section 66 of Finance Act, 1994. However, respondent No. 2 came to the conclusion that on the income of Rs. 65,09,825/- earned by the petitioner would fall within the category of services and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause that the petitioner would fall within the category of 73 (1) of the Act extended period to be falling outside the category of 30 months and for an extended period i.e., five years. He relies on the master circular on show cause notice adjudication and recovery issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, dated the 10.03.2017, which he has annexed along with his written submission, which deals with the show cause notice and the demand made by the revenue in several situations. 10. Learned counsel for the petitioner brings to the notice of this Court the ingredients required for the extended period at 3.2 of the said circular, which reads as under: 3.2 Ingredients for extended period: Extended period can be invoked only when there are ingredients necessary to justify the demand for the extended period in a case leading to short payment or non-payment of tax. The onus of establishing that these ingredients are present in a given case is on revenue and these ingredients need to be clearly brought out in the Show Cause Notice alongwith evidence thereof. The active element of intent to evade duty by action or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is not invocable. 15. In the case of M/s Luit Developers Private Limited vs. Commissioner of CGST Central Excise, Dibrugarh passed by the Customs Excise Service Tax Appellate Tribunal, Kolkata, in Service Tax Appeal No. 75792/2021 , he relies on para No. 11 which reads as under: 11. I also find force in the submission of the Ld Counsel for the appellant that figures reflected in Form 26AS cannot be used to determine Service Tax liability unless there is any evidence shown that it was due to a taxable service as held in Kush Constructions(supra). Also, figures shown to Income Tax authorities cannot be used to determine Service Tax as held in Synergy Audio Visual Workshop Pvt Ltd(supra) and Deluxe Enterprises(supra). 16. On these grounds he contends that merely relying upon the information from the income tax returns, the demand cannot be made and the show cause notice cannot be issued and adjudication could not have been made. Hence, he seeks for quashing of the show cause notice and consequently to allow his petition. 17. Per contra learned counsel representing the revenue has filed his detailed statement of objections and he contends that apparently it is not disputed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travention of the provisions of the chapter to evade payment of service tax. These requirements are enshrined in the proviso to Section 73 (1) of the Finance Act 1994. 20. The further argument put forth by the learned counsel for the petitioner that merely on the basis of information secured from the ITR or the tax department, proceedings could not have been initiated against the assessee, would also not be sustainable for the reason that on the basis of information obtained from the ITR, the revenue issued show cause notice, called for reply, which was furnished, a fair opportunity of hearing was given to the assessee/petitioner, asking him to produce necessary documents and details wherein the only defence taken by the petitioner was that he was under the impression that he would not fall within the category of registration under the service tax and therefore, he is exempted from making payment of service tax, is not sustainable hence negatived. 21. To rebut this argument of the revenue, it is a vehement contention of learned counsel for the petitioner that in the show cause notice issued by the revenue, there is no specific plea or specific averment made as to for what reason an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he was under the impression that he is exempted for payment of service tax and for agricultural sector and hence, he did not obtain service tax number and did not pay the service tax. Pursuant to which, an opportunity was given to the petitioner and even in the hearing, he had participated and same thing was narrated with regard to carrying on the drilling of bore wells for agricultural land and hence, he would not fall within the category of the service tax registration. 24. Therefore, it is apparently clear that once the show cause notice is issued under the proviso to Section 73 (1) of the erstwhile Finance Act, invoking the extended period of limitation beyond the 30 months and once an inquiry is conducted, opportunity is given to file reply when adjudication is held the grounds whatever urged by the petitioner herein would have to be challenged by way of an appeal provided under the Act of 1994, rather than challenging the jurisdiction of the revenue for issuance of the show cause notice. It cannot be said that the revenue does not have the jurisdiction to issue show cause notice under Section 73 (1) of the Act as it is not specified in detail with regard to the requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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