Whether an extended-period Service Tax demand can be sustained when the SCN is based solely on Form 26AS?
In the case of:
M/s Dipak Kumar v. Commissioner of CGST & Central Excise, Patna.
[CESTAT, Kolkata | Service Tax Appeal No. 75821 of 2022| Final Order No. 75870/2026 | Decided on 10.07.2026 | Coram: R. Muralidhar, Member (Judicial)]
Background
The Appellant was engaged as a sub-contractor for work under the Ghar Ghar Jal Yojna. A Show Cause Notice dated 23.12.2020 was issued for the year 2015–16, based solely on Income Tax Form 26AS, demanding Service Tax of ₹4,10,350 along with interest and penalty by invoking the extended period. The Appellant claimed that the services were exempt under Notification No. 25/2012-ST dated 20.06.2012. The Commissioner (Appeals) partly reduced the demand, leaving the demand relating to hiring of a JCB.
Issue
Whether an extended-period Service Tax demand can be sustained when the Show Cause Notice is issued solely on the basis of Form 26AS without proper verification or determination of the nature/classification of the services.
Tribunal's Reasoning and Decision
The Tribunal observed that the SCN was issued purely on the basis of Form 26AS and that no verification was conducted before issuing the demand. Although the Appellant had no case on merits regarding the JCB rental demand, the Tribunal found that the Appellant could have entertained a bonafide belief that Service Tax was not payable, particularly since the services related to the same exempt project. Relying on the consistent view that an extended-period demand cannot be sustained when it is based purely on Form 26AS returns, and following Shri Raj Kishore Bhagat v. Commissioner of CGST & Central Excise, Patna, the Tribunal set aside the confirmed demand on the ground of limitation. The appeal was accordingly allowed with consequential relief, if any, as per law.
(Above brief of the judgement prepared by Ms. Shweta Singh, Advocate, Dated: 08 Aug 2026)