Gauhati High Court
Commissioner Of Cgst And Excise vs M/S Rishu Enterprise on 22 April, 2026
Author: M. Zothankhuma
Bench: Michael Zothankhuma
Page No.# 1/21
GAHC010166902024
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : C.Ex.App./6/2025
COMMISSIONER OF CGST AND EXCISE,
DIBRUGARH, C.R. BUILDING, 'F' LANE, MILAN NAGAR, DIBRUGARH,
ASSAM.
VERSUS
M/S RISHU ENTERPRISE
CHURCH FIELD, NEHRU MAIDAN, P.O. TEZPUR 784001, DIST. SONITPUR,
ASSAM.
For the Appellant : Mr. S.C. Keyal, ...Advocate.
For the Respondent : Ms. M.L. Gope,
Ms. N. Hawelia, ... Advocates.
-BEFORE-
HON'BLE MR. JUSTICE MICHAEL ZOTHANKHUMA
HON'BLE MR. JUSTICE KAUSHIK GOSWAMI
Date of hearing & judgment : 22.04.2026
JUDGMENT & ORDER (ORAL)
(M. Zothankhuma, J)
1. Heard Mr. S. C. Keyal, learned counsel appearing for the appellant. Also heard Ms. M. L.
Gope and Ms. N. Hawelia, learned counsels appearing for the respondent.
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2. The present appeal makes a challenge to the Final Order No. 75177/2022 dated
08.02.2024 passed by the Hon’ble CESTAT, Kolkata, in Service Tax Appeal No. 75509/2022 by
which the appellant’s demand for Service Tax was held to be not sustainable, on the ground
that the same had been made merely on the basis of Form 26 AS and by granting an
extended period of limitation by the Adjudicating Authority for making such a claim.
3. The substantial questions of law that were framed and the Preliminary objection, which
is question No. (iii), are as follows:
“(i) Whether the Tax Authorities can raise and confirm a Service Tax demand solely on
the basis of the entries in Form 26-AS issued by the Income Tax Department, which
has not been rebutted by an assessee.
(ii) Whether the CESTAT, Kolkata was right in holding that the investigation and the
consequential show-cause-notice issued to an assessee was not permissible, by
invoking the extended period of limitation under Section 73 of the Finance Act, 1994.
(iii) Whether the appellant could have filed an appeal on the basis of a composite
notice demanding Service Tax from 4 (four) assessment years, the total of which
crosses the monetary limit of Rupees 2 Crores, without any of the Service Tax for each
individual assessment year having crossed the above threshold.”
4. The appellant challenges the Final Order No.75177/2024 dated 08.02.2024 passed by
the learned CESTAT, Kolkata on various grounds, one being that the learned Appellate
Tribunal has failed to appreciate the respondent/assessee’s conduct, which involves non-
compliance with statutory requirements and failure to furnish documentary evidence i.e.
suppression of facts, despite being given ample opportunity to give reasons why Service Tax
should not be paid for the period from 2014-2015 to 2017-2018.
5. The case of the appellant is that the respondent/assessee did not submit any written
reply to the Demand-cum-Show-Cause Notice dated 31.12.2020. It did not provide work
orders, payment vouchers or running bills to support its contention that the services provided
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were not liable to Service Tax. Instead, reliance was placed on income tax records including
Form-26AS and Audited Financial Statements, which by themselves were insufficient to rebut
the Service Tax demand.
6. The further case of the appellant is that the learned Appellate Tribunal erred in
concluding that Service Tax demand based solely on Form-26AS was unsustainable. Also in
the absence of any supporting documents or explanation from the respondent/assessee, the
Adjudicating Authority was justified in confirming the Service Tax demand of
Rs.2,60,99,364/-, for the period from 2014-2015 to 2017-2018.
7. The respondent’s case on the other hand is that the assessee in their reply to the
Demand-cum-Show- Cause Notice, vide letter dated 20-02-2021, prayed for allowing them 30
days’ time to submit relevant documents, besides the Form-26AS for the years 2014-2015 to
2017-2018, Audited Balance Sheets and copies of the Income Tax Returns submitted for the
above period. Further, since they could not locate Work Orders relating to the earlier years,
they prayed for time from the Adjudicating Authority to collect the required documents and
submit the same. However, the same was denied to them.
8. The learned counsel for the respondent/assessee submits that the demand for Service
Tax by the CGST can only be made in respect of a particular assessment/financial year. She
submits that in the present case, the Service Tax demand made by the CGST Authority from
the respondent/assessee, is for the years 2014-2015 to 2017-2018, which is reflected in
paragraph-19 of the order dated 23.03.2022 issued by the Adjudicating Authority, which is as
follows :
SI.N Financial Gross Taxable Rate Service Service Short/Not
o. year receipt value Tax tax paid
payable paid
Page No.# 4/212014-15
(October
1. to March) 50157456 50157456 12.36 6199462 0 6199462
%
2. 2015-16 58450082 58450082 14.50 8475262 0 8475262
%
3. 2016-17 75888391 75888391 15.00 11383259 0 11383259
%
4. 2017-18 275876 275876 15.00 41381 0 41381
%
(April-
June)
Total 18477180 18477180 – 26099364 26099364
5 5
9. The learned counsel for the respondent submits that the demand for Service Tax made
by the appellant had been made in respect of exempted items, in terms of Section 66(D)(a)
(iii) and (e) of the Finance Act, 1994, as per the finding of the learned CESTAT. Thus even on
merit, the demand for service tax could not have been raised by the appellant.
10. The above being said, the learned counsel for the respondent/assessee submits that
the present appeal filed by the CGST Authority was not maintainable, on the ground that the
same was not in consonance with the Notification dated 06.08.2024 issued by the Finance
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Ministry, Legal Cell, regarding the attempt by the Government to reduce Government
litigation, by raising the monetary limits for filing Appeals by the departments before the
learned CESTAT, High Courts and Supreme Court in Central Excise and Service matters, which
are as follows :
SI. No. Appellate Forum Monetary limit 1. CESTAT Rs.60 Lakh 2. High Courts Rs.2 Crore 3. Supreme Court Rs.5 Crore
11. The learned counsel for the respondent/assessee submits that the year-wise Service
Tax demand for each of the above assessment years is less than Rs. 2 crores and it is only
when all the 4 years of Service Tax demand are added up, has the amount of claimed Service
Tax crossed Rs.2 crores. She submits that in terms of the Notification dated 06-08-2024
issued by the Finance Ministry, the present appeal is not maintainable, as the demand for
Service Tax would have to be done on year-wise basis and not by consolidating and adding
up all the Service Tax demand for 4 years, as has been done in the present case. She submits
that when the Service Tax demand for different years are added up, like has been done in the
present case, even those cases where Service Tax demands could not have been made due to
limitation, are also brought into the fold of the demand for payment of Service Tax, along
with those demands which are within the limitation period. She also submits that in an appeal
filed by the appellant before this Court, where the Service Tax demand by the CGST was
below Rs.2 crores, the said appeal had been withdrawn by the CGST, vide order dated
05.12.2024 passed by a co-ordinate bench of this Court in C.Ex.App. No.5/2020. She
accordingly submits that the present appeal should also be dismissed in view of the
Notification dated 06-08-2024.
12. Ms. M. L. Gope, learned counsel for the respondent, in support of her submissions, has
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relied upon the Division Bench of the Bombay High Court in the case of Commissioner of
Income-tax Vs. Polycott Corporation reported in 2009 SCC OnLine Bom 2148 and in
the case of Aasawa Brothers Corporate Avenue, Through its Authorzed Partner Vs.
Union of India, Through Hits Revenue Secretary and Ors., reported in 2026 SCC
OnLine Bom 1616.
13. The learned counsel for the respondent also submits that the Division Bench of the
Allahabad High Court in the case of Kesar Enterprises Ltd. Vs. State of U.P and Ors,
reported in 2010 SCC OnLine All 1608 has held that it is a settled principle of law that
each year is a separate assessment year for the purpose of assessment.
14. The learned counsel for the respondent further submits that when the respondent had
filed its appeal before the CESTAT, Kolkata against the impugned order of the Adjudicating
Authority, it had filed one appeal. However, in terms of the stand taken by the respondent,
they should have filed 4 different appeals before the learned CESTAT, Kolkata, and inasmuch
as, the Service Tax payable by the respondent pertains to 4 different assessment years.
15. Mr. S. C. Keyal, learned counsel for the appellant, submits that there is no bar for
making a composite notice of different assessment years and clubbing the Service Tax
payable for different assessment years. He also submits that if the threshold of Rs.
2,00,00,000/- can be achieved, by clubbing the Service Tax payable by a party for different
assessment years, an appeal would lie before the High Court in terms of the said notification
dated 06.08.2024. In support of his submission, he relied upon the decision of the Single
Judge of this Court in the Case of M/s Rasidul Hoque & Ors. Vs. The State of Assam,
Through the Commissioner and Secretary to the Government of Assam, Ministry of
Finance and Taxation & Ors. reported in 2024 0 Supreme (AS) 9346 and in the case of
M/s Mathur Polymers Vs. Union of India & Ors. in WP(C) No. 2394/2025 & CM
Appl. No. 11289/2025 decided by the Division Bench of the Delhi High Court.
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16. The learned counsel for the appellant also submits that Circular No. 207/1/2024 dated
26.06.2024, issued by the Government of India, Ministry of Finance, Department of Revenue,
Central Board of Indirect Taxes and Customs, GST Policy Wing, has clearly stated in
paragraph 3(viii) that in a composite order, which disposes more than one appeal/demand
notice, the monetary limits shall be applicable on the total amount of tax/interest/penalty/late
fee, as the case may be and not on the amount involved on an individual appeal or demand
notice.
17. On the other hand, Mr. S. C. Keyal, learned counsel for the appellant submits that even
though the respondent had claimed that the service provided by the respondent was
exempted from Service Tax under Section 66(D)(a)(iii) and (e) of the Finance Act, 1994, no
proof of such exempted service had been provided by the respondent by way of documents,
as had been demanded by the appellant.
18. We have heard the learned counsels for the parties.
19. The appellants had issued a consolidated show cause notice dated 31/12/2020
demanding payment of Service Tax for 4(four) different assessment years, as the same had
not been paid by the respondent assesse on account of suppression of facts and documents.
The respondent assesse prayed for time stating that it could not trace some of it’s documents
to give a proper reply to the show cause notice.
20. The Adjudicating Authority, vide order dated 23-03-2022, then passed the demand for
Service Tax, as follows:
“a. I confirm the demand of Service Tax and cess amounting to Rs. 2,60,99,364/-
(Rupees Two Crore Sixty Lakhs Ninety Nine Thousand Three Hundred and. Sixty Four
only from M/s Rishu Enterprise for the period from 2014-15 (Oct-March) to 2017-18
(April-June) which is to be recovered in terms of proviso to Section 73(2) of the
Finance Act 1994 read with Section 174 of CGST Act, 2017 and order for recovery of
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b. I also order for recovery of interest at the applicable rates from M/s Rishu
Enterprise on the amounts demanded at (a) above, in terms of Section 75 of the
Finance Act, 1994 read with Section 174 of CGST Act, 2017.
c. I impose a penalty of Rs. 2,60,99,364/-(Rupees Two Crore Sixty Lakhs Ninety
Nine Thousand Three Hundred and Sixty Four only) on M/s Rishu Enterprise under
Section 78 of the Finance Act 1994 read with Section 174 of CGST Act, 2017. However,
in terms of second proviso to section 78 of the Finance Act, 1994, the notice has the
option to pay 25% of the penalty imposed if they pay the entire amount of Service Tax
demanded along with interest and such reduced penalty (here 25%) within thirty days
from communication of this order.
d. I impose penalty of Rs. 1,20,000/- (Rupees One Lakh Twenty Thousand only)
on M/s Rishu Enterprise under Section 70 of the Finance Act 1994 read with Section
174 of the CGST Act 2017 as amended for not filing ST-3 Returns for the relevant
period and order for recovery of the same.
e. I also impose penalty of Rs. 10,000/-(Rupees Ten Thousand only) on M/s Rishu
Enterprise under Section 77 of the Finance Act 1994 read with Section 174 of the
COST Act 2017 for failure to furnish information /documents sought by the department
and order for recovery of the same.”
21. The challenge made to the Adjudicating Authority order dated 23-03-2022 by the
respondent/assessee before the learned CESTAT, Kolkata, Regional Bench-Court No.1, in
Service Tax Appeal No.75509/2022 was allowed, vide Final Order No. 75177/2024 on 08-02-
2024, by holding that the demand of Service Tax was not sustainable against the
respondent/assessee, merely on the basis of Form-26AS issued by the Income Tax Authority
and also in view of the extended period of limitation granted by the Adjudicating Authority.
22. On considering the fact that a preliminary objection has been raised, in terms of the
CBIC Instruction No. CBIC/160390/20/2024-JC-CBEC dated 6-8-2024, as to the
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maintainability of this appeal, we intend to first decide the issue raised in the Preliminary
Objection.
23. The Preliminary Objection no. (iii), is to the effect that a Central Excise Appeal before
the High Court, in terms of CBIC instruction No. CBIC/160390/20/2024-JC-CBEC dated 6-8-
2024, would require the demand for Service Tax to be not less than the minimum monetary
limit of Rs. 2,00,00,000/- for each individual assessment year, which is missing in the present
appeal. The appellant has made a composite demand of Service Tax in respect of 4 (four)
assessment years from 2014-15 to 2017-18, which in total amounts to Rs. 2,60,99,364/-,
though the requirement of the above notification appears to require the appeal amount for
each assessment year to be not less than Rs. 2,00,00,000/-. The preliminary objection has
been made by the respondent, due to the Service Tax demand for each of the four
assessment years, being below Rs. 2 crores.
24. The notification dated 06.08.2024 issued by the Ministry of Finance (Legal Cell) for
reducing government litigation, by raising the monetary limits for filing appeals by CBIC
before CESTAT, High Court and Supreme Court in matters relating to Central Excise and
Service Tax, provides as follows:
“Subject: Reduction of Government litigation raising of monetary limits for filing
appeals by the Department before CESTAT, High Court and Supreme Court in legacy
Central Excise & Service Tax-reg.
In exercise of powers conferred by section 35R of the Central Excise Act, 1944 made
applicable to Service Tax vide section 83 of the Finance Act, 1994, and in partial
modification of the Board instructions issued from F. No. 390/Misc./ 163/ 2010-JC
dated 17.08.2011, the Central Board of Indirect Taxes and Customs hereby fixes the
following monetary limits below which appeal shall not be filed in the CESTAT, High
Court and Supreme Court:
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SI. No. Appellate Forum Monetary limit
1. CESTAT Rs.60 Lakh
2. High Courts Rs.2 Crore
3. Supreme Court Rs.5 Crore
2. This instruction applies only to legacy issues l.e., matters relating to Central Excise
and Service Tax, and will apply to pending cases as well.
3. Adverse judgements relating to the following should be contested irrespective of the
amount involved –
a. Case where the constitutional validity of the provisions of an Act or Rule is
under challenge; or
b. Case where Notification/ Instruction / Order/ Circular has been held illegal or
ultra vires.
4. Except for the above, all other terms and conditions of Instructions dated
17.08.2011 stands.
5. Relevant extracts from Section 35R of the Central Excise Act, 1944 are reproduced
below for ease of reference-
(2) Where, in pursuance of the orders or instructions or directions, issued under
sub-section (1), the Central Excise Officer has not filed an appeal, application.
revision or reference against any decision or order passed under the provisions
of this Act, it shall not preclude such Central Excise Officer from filing appeal.
application, revision or reference in any other case involving the same or similar
issues or questions of law.
(3) Notwithstanding the fact that no appeal, application, revision or reference
has been filed by the Central Excise Officer pursuant to the orders or
instructions or directions issued under sub-section (1), no person, being a party
in appeal. application, revision or reference shall contend that the Central Excise
Officer has acquiesced in the decision on the disputed issue by not filing appeal,
application, revision or reference.
(4). The Commissioner (Appeals) or the Appellate Tribunal or court hearing
such appeal, application, revision or reference shall have regard to the
circumstances under which appeal, application, revision or reference was not
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filed by the Central Excise Officer in pursuance of the orders or instructions or
directions issued under sub-section (1).
6. Difficulties faced in implementation of these Instructions, if any, may be brought to
the knowledge of the Board.”
25. Thus, for the purpose of reduction of government litigation, appeals by the CGST
authority before a High Court would require the monetary value of the appeal to be of the
minimum value of Rs. 2 crores. In the present case, the Service Tax demand made by the
appellant from the respondent, is spread over 4 (four) assessment years, i.e., from 2014-15
to 2017-18. The service tax demand for each of the assessment year individually is less than
Rs. 2 crores. However, when the Service Tax demand for the 4 (four) assessment years is
added up, the total Service Tax demand reaches the Rs. 2 crores benchmark.
26. Thus, a question arises as to whether the appeal filed by the appellant is maintainable in
terms of the notification dated 06.08.2024, i.e., whether it is permissible to club together the
Service Tax demand for 4(four) assessment years and file an appeal on the consolidated
Service Tax or whether the Service Tax demand has to be considered only in respect of each
individual assessment year.
27. The Service Tax demand made by the CGST Authority from the respondent/assessee for
the years 2014-2015 to 2017- 2018 are as follows:
SI.N Financia Gross Taxable Rate Service Servic Short/Not
o. l year receipt value Tax e tax paid
payable paid
1. 2014-15 50157456 50157456 12.36% 6199462 0 6199462
(Octobe
r to
March)
2. 2015-16 58450082 58450082 14.50% 8475262 0 8475262
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3. 2016-17 75888391 75888391 15.00% 11383259 0 11383259
4. 2017-18 275876 275876 15.00% 41381 0 41381
(April-
June)
Tota 184771 184771805 – 26099364 26099364
l 805
As can be seen from the chart, the Service Tax demand for each assessment year is
less than Rs. 2 crores. The Rs. 2 crores mark is reached only when all the service tax demand
for 4 years is added together.
28. In the case of Polycott Corporation (supra), the Bombay High Court considered
whether an appeal could have been filed before the High Court, if the tax demand did not
exceed Rs.4,00,000/- in terms of the Central Board of Direct Taxes Instruction No.05/2008
dated May 15th, 2008. Paragraph 5 of the said instruction No. 05/2008 states as follows:
“5. It would be clear from the above that if in the case of an assessee if the disputed
issues arise in more than one assessment year, appeals are to be filed only in respect
of such assessment year or years in which the tax effect in respect of the disputed
issues exceeds the monetary limit specified in para. 3. In other words, even if in
respect of the same issue in respect of the same assessee for other assessment years
the monetary limit is not more than Rs.4.00 lakhs, appeal need not be filed.Para.6
makes it clear that in such a case if an appeal is not filed there will be no presumption
that the Income-Tax Department has acquiesced in the decision on the disputed
issues.”
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29. Paragraph 28 of the judgment of Polycott Corporation (supra) speaks of Paragraph
5 of the instruction No. 05/2008 dt 15-5-2008 which is as follows:
“28. The Assessing Officer shall calculate the tax effect separately for every
assessment year in respect of the disputed issues in the case of every assessee. If, in
the case of an assessee, the disputed issues, arise in more than one assessment year,
appeal shall be filed, in respect of such assessment year or years in’ which the tax
effect in respect of the disputed issues exceeds the monetary limit specified in
paragraph 3. No appeal shall be filed in respect of an assessment year or years in
which the tax effect is less than the monetary limit specified in paragraph 3. In other
words, henceforth, appeals will be filed only with reference to the tax effect in the
relevant assessment year.”
30. The Bombay High Court in the above case of Polycott Corporation (Supra) held
that the Court has to consider the plain language of the paragraph and the object behind the
said provisions and the object appeared to be not to burden Courts and Tribunals in respect
of matters where the tax effect was less than the prescribed limit. It thus held that paragraph
5 of the Instructions made it clear that a duty was cast on the Assessing Officer, that even if
disputed questions arose for more than one assessment year, then an appeal should be filed
only in respect of those years where the monetary limit was specified in paragraph-3 of the
Instruction.
31. In the case of Aasawa Brothers Corporate Avenue (Supra), the Division Bench of
the Bombay High Court was to consider whether the issuance of consolidated show-cause
notices under Section 74 of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to “CGST Act“) covering multiple financial years, was sustainable in law, in light of
the binding precedents of the Bombay High Court. The Bombay High Court, by referring to its
earlier judgments in Milroc Good Earth Developers vs. Union of India (2025-TIOL-
1697-HC-MUM-GST), held that a single consolidated show-cause notice covering multiple
financial years cannot be issued under Section 74 of the CGST Act. It also held that the
judgment in Milroc Good Earth Developers (Supra) had considered the judgment of the
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Delhi High Court in Ambika Traders Vs. Additional Commissioner, DGGSTI in WP(C)
No. 4853/2025 and held that a consolidated notice spanning several years may be
permissible, if the pattern of fraud may not be capable of being established in isolation of
different financial years. Thus, when there is fraud, which is in a maze of transactions over
several years, a consolidated notice may be permissible. However, in the normal course,
consolidated notice was impermissible in the absence of exceptional circumstances relating to
fraud,that was practiced over multiple financial years warranting such consolidation.
Paragraph No. 20 & 21 of the judgment in the case of Aasawa Brothers Corporate
Avenue (Supra) are as follows:
“20. The statutory scheme under the CGST Act makes the limitation for
determination of tax dependent upon the due date for furnishing the annual return for
the respective financial year to which the demand relates. The limitation, therefore,
runs independently for each financial year. Clubbing multiple financial years in a single
show cause notice has the effect of aggregating distinct tax periods governed by
separate limitation timelines, which may prejudice the assessee’s right to raise year-
specific defences.
25. This Court has consistently taken the view that a single show cause notice
covering multiple financial years, in the absence of exceptional circumstances for
relating to fraud that may be practiced over multiple financial years warranting such
consolidation, is not sustainable in law. Judicial discipline and consistency require that
we follow the binding precedents of this Court.”
32. In the case of Kesar Enterprises Ltd. (supra), the Division Bench of the Allahabad
High Court, while dealing with a matter relating to payment of tax under Section 21 of the
Uttar Pradesh Trade Tax, 1948, held that it was a settled principle of law that each year was a
separate assessment year for the purposes of assessment.
33. The Government of India, Ministry of Finance, Department of Revenue, Central Board
of Indirect Taxes and Customs, GST Policy Wing had issued Circular No.207/1/2024-GST
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dated 26.06.2024 fixing monetary limits for filing appeals or applications by the Department
before GSTAT, High Courts and Supreme Court for the purpose of reduction of Government
litigation, wherein it was reflected at paragraph 3(viii) as follows :
“3(viii) In a composite order which disposes more than one appeal/demand notice, the
monetary limits shall be applicable on the total amount of tax/interest/penalty/late fee,
as the case may be, and not on the amount involved in individual appeal or demand
notice.”
34. In the case of M/s Mathur Polymers (supra), the Division Bench of the Delhi High
Court was seized of a matter regarding a challenge made to a combined show-cause notice
under Section 74(10) of the CGST Act in respect of allegations involving the fraudulent
availment of ITC, where the transactions were spread over several financial years. The
Division Bench of the Delhi High Court in the above case held that in cases involving
allegations of fraudulent availment of ITC spanning several years, a consolidated notice was
permissible in terms of Section 74(10) of the CGST Act.
35. As can be seen from the decisions of the Bombay High Court, the issue of a composite
notice in respect of different assessment years cannot be made, unless there is an allegation
of fraud spanning several years and which may not be capable of being established, if the
notice is issued in isolation of each assessment/financial year.
36. The decision submitted by the learned counsel for the respondent pertains to a
composite notice being permitted by the Delhi High Court, only in cases of fraud, inasmuch
as, fraud may not be capable of being established if the notice was issued in isolation of each
assessment/financial year.
37. The Single Bench of the Gauhati High Court in M/s Rasidul Hoque (supra) has held
that the authorities had the competence and jurisdiction to pass a composite order for 2
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financial years and that the same did not amount infraction of Section 74(10) & 73(1) of the
Assam GST Act, 2017.
38. Section 73(1) of the Finance Act, 1994 states as follows :
“(1) Where any Service Tax has not been levied or paid or has been short-levied or
short-paid or erroneously refunded, Central Excise Officer may, within thirty 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
person 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 mis-statement; or
(d) suppression of facts, or
(e) contravention of any of the provisions of this Chapter or of the rules made
thereunder 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 “thirty 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 thirty
months or five years, as the case may be.”
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39. A reading of the various provisions prima facie indicates that a consolidated notice
demanding Service Tax, covering various financial years, to enable the appellants to reach the
benchmark of 2 crores, is not permissible in terms of the notification dated 06/08/2024. It
appears that the demand for Service Tax has to be calculated with respect to a particular
assessment year in the normal course, or else the very purpose of the notification dated
06/08/2024 could be defeated. However, when there is a fraud allegedly played by the
assessee and it is not known as to whether the unpaid Service Tax was the result of a maze
of transactions spread over different years, thereby making it difficult to determine the exact
Service Tax payable for different assessment years, making a composite notice comprising
several assessment years for payment of a consolidated Service Tax appears to be
permissible. Thus, in a case of fraud spanning over different assessment years, it cannot be
said that a consolidated show cause notice would not come within the four corners of the
notification dated 06/08/2024.
40. As can be seen from the case in hand, the limitation period for demand of Service Tax
in terms of section 73 of the Service Tax Act provides for a period of 30 months from the
relevant date, service of notice to the assesse. However, the proviso to section 73 provides
that in cases of fraud, collision, willful mis-statement or suppression of facts or contravention
of any of the provisions of Chapter-V of the Finance Act, 1994, the limitation period of 30
months would be substituted by the words “five years”.
41. In the case of Ambika Traders through proprietor vs. Additional
Commissioner, Adjudication, DGGSTI, CGST Delhi North [WP(C) 4853/2025], the
Delhi High Court has held that in so far as fraudulently availed or utilized ITC is concerned,
the language used in Section 74 (3) & (4) of the CGST Act provides “for any period” and “for
such period” respectively, in so far as the issue of consolidated notice for various financial
years was concerned. It thus held that a notice can be issued for a period which could be
more than one financial year, in so far as the matter related to non-payment or short
payment or erroneously refunded or input tax credit wrongly availed or utilized by reason of
Page No.# 18/21
fraud.
42. In this case, the show cause notice dated 31/12/2020 that had been issued to the
respondent was with regard to non-disclosure of the gross amount of taxable service
provided by the respondent during the period from 2014-15 to 2017-18, by alleging
intentional and deliberate suppression of information from the appellant, which was in
contravention of section 67, read with section 70 of the Finance Act, 1994, and the rules
made thereunder. The show notice also stated that though the assessee had received a gross
amount of Rs. 18,47,71,805/- during the said period, against which the assessee was to pay
Service Tax of Rs. 2,60,99,364/-, the same had not been deposited. Thus the assessee was
liable to make payment of the evaded Service Tax and was also liable for penal action and
payment of interest under section 78 and 75 of the Finance Act, 1994 respectively.
43. The above being said, we have been taken through the recent decision of the Bombay
High Court on 17.04.2026, passed in a batch of writ petitions, the lead case being Writ
Petition No.16848/2025 “M/s. Rollmet LLP Vs. The Union of India & Ors.” In M/s.
Rollmet LLP(supra) the Bombay High Court has discussed the correctness of the earlier
decision of the Bombay High Court in Milroc Good Earth Developers (supra) and also
reflected on the decision of the Delhi High Court in Ambika Traders(supra) and M/s
Mathur Polymers (supra), which were not disturbed by the Hon’ble Supreme Court.
Further, the Bombay High Court in M/s. Rollmet LLP(supra) requested for placing the
issue before it to a Larger Bench for a decision on the following questions of law, which are
reflected in para 30 of the said judgment as under:-
“1) Whether the operation of sub-section (1) of Section 73/74 of the CGST Act read
with the provisions of sub-section (3) is in any manner controlled by the provisions of
sub section (10), so as to create an embargo, on the department to issue a
consolidated show cause notice for different years ?
2) Whether the provisions of sub-section (10) of Section 73/74 of the CGST Act per se
prohibits the issuance of single consolidated show cause notice for multiple financial
years/tax periods?
3) What is the effect of Section 160 of the CGST Act on the proceedings initiated by
Page No.# 19/21the proper officer under Section(s) 73/74 of the CGST Act by issuance of a
consolidated show cause notice for different periods?
4) Whether the decision of the Division Bench in Milroc Good Earth Developers
v/s Union of India & Ors., when it holds that the proper officer lacks authority to
club various financial years/tax periods, in issuing a single consolidated show cause
notice under Section 73(1) & (3)/74(1) & (3) of CGST Act lays down the correct
position in law?
5) In terms of Article 141 of the Constitution of India, what is the legal position as
brought about in the order of the Supreme Court in the case of Mathur Polymers
(supra) ?”
44. Thus the issue in the present case is not with regard to fraud, but with regard to
suppression of facts on the part of the respondent, for non-payment of their Service Tax,
though it is the case of the respondent that the required documents had been submitted
before the learned CESTAT. It is clear from the proviso to section 73 (1) of chapter -V of the
Finance Act, 1994, that the limitation period for claiming Service Tax on grounds of
suppression of facts is 5 years.
45. Though there appears to be no bar for issuing a composite notice for claiming Service
Tax on the ground of suppression of facts, when the demand for Service Tax for each
assessment year can be determined, the issue of whether an appeal can be filed in the High
Court by consolidating the demand for Service Tax for 4 assessment years to reach the
monetary limit would have to be decided. In the present case, the show cause notice dated
31/12/2020 has at para 19, clearly determined the Service Tax payable by the assessee for
each of the 4(four) assessment years. Though the demand of Service Tax for each
assessment year is determinable, we need not go into the issue whether a composite demand
notice for Service Tax, comprising different assessment years can be made, if the monetary
limit in respect of the demanded/payable Service Tax, which is not time-barred for each
assessment year, is not attained for filing an appeal. If the demand for Service Tax in respect
of one of the assessment years is beyond the limitation period, the time barred demand
cannot be made a part of the consolidated show cause notice. Thus, even if we are to
assume that a consolidated demand for Service Tax comprising many assessment years can
Page No.# 20/21
be made, the time-barred claim cannot be a part of the consolidated claims.
46. Due to the above reasons, an additional substantial question of law has been framed,
i.e., as to “whether the demand for Service Tax for any of the 4 (four) assessment years by
the appellant is barred by Section 73(1) of the Finance Act, 1994, and if the demand of
Service Tax for the 4 years is not barred by limitation, whether the total Service Tax for the 4
years would reach the monetary limit of Rs. 2,00,00,000/- (Rupees two lakhs), in terms of
the Notification dated 06.08.2024″, for filing this appeal in the High Court.
47. On considering the chart given by the appellant with regard to the demand for service
tax payable by the respondent for the years 2014-2015 to 2017-2018 vis-Ã -vis the show
cause notice issued on 31.12.2020, we find that the claim for Service Tax for the assessment
year 2014-2015 is barred by limitation in terms of Section 71(3) of the Finance Act, 1994.
Accordingly, despite invoking the extended period of limitation as provided in Section 73(1) of
the Finance Act, 1994, the demand for payment of Service Tax by the appellant can only be
for the years 2015-2016 to 2017-2018, excluding the time-barred claim for the year 2014-
2015. As per the show cause notice/chart provided by the appellant regarding the claim for
Service Tax, we find that the Service Tax demand for 4 assessment years is for a total amount
of Rs. 2,60,99,364/-. However, the Service Tax payable for the year 2014-2015, which is time-
barred, is for Rs. 61,99,462/-. Thus, the total valid demand for payment of Service Tax minus
the barred claim is Rs. 1,98,99,902/-, which is below the monetary limit provided in the
Notification dated 06.08.2024. As such, the appeal being not maintainable in terms of the
above said notification and keeping in view of the fact that the appellant had withdrawn a
similar case, i.e., C.Ex. App. 5/2020 (Commissioner, Central Excise and Service Tax,
Guwahati Vs. Sarvopari Impex Pvt. Ltd.), as the appeal amount therein was below the
monetary limit, the present appeal is not maintainable.
48. The dismissal of the appeal has only been made in view of the non-maintainability of
the present appeal, as the demand for Service Tax is hit by the monetary limit prescribed in
Page No.# 21/21
the Notification dated 06.08.2024. The issue as to whether the demand for Service Tax can
be added together, for overcoming the monetary limit provided in the Notification dated
06.08.2024, for filing an appeal in the High Court is left to be decided in an appropriate case.
49. For the reasons stated above, the appeal stands dismissed.
JUDGE JUDGE Comparing Assistant
