Service Tax Assessment Order Invalidated Due to Excessive Time Delay Beyond Statutory One-Year Limitation Period

HC ruled that the service tax assessment order issued after a substantive delay of five years and ten months was time-barred under Section 73(4B) of the Finance Act, 1994. The Revenue failed to demonstrate exceptional circumstances justifying the prolonged delay beyond the prescribed one-year limitation period. Consequently, the impugned order imposing service tax liability, interest, and penalty was quashed, with the court emphasizing that the statutory time limitation cannot be arbitrarily extended without compelling justification. The application challenging the delayed assessment was allowed, effectively nullifying the tax demand. .....

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