Issue of invoking an extended period of limitation for service ...

Tax Assessment: Interpretation Gaps Don't Justify Extended Limitation Period Without Willful Intent.

Case Laws     Service Tax

November 7, 2024

Issue of invoking an extended period of limitation for service tax assessment in cases involving interpretation of legal provisions. It establishes that mere interpretation differences or omissions without intent cannot justify invoking the extended period. The key points are: Interpretation issues regarding taxability do not constitute willful suppression of facts justifying extended limitation. The responsibility lies with the tax officer to scrutinize returns and make assessments within the normal period. Any revenue loss due to non-scrutiny is a policy risk taken by the department. Extended limitation requires evidence of fraud, collusion, willful misstatement or violation with intent, which cannot be presumed from differing interpretations or non-scrutiny. The tribunal ruled in favor of the assessee on the limitation issue, deeming it unnecessary to examine the merits.

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