Limitation period

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 November 2013 Issue relates to April 11 to Sep 11. Filed HY return on Oct 25, 2011.
But Show Cause notice is issued by the Dept on 10.04.2013. Is this hit by limitation?.

Please reply.

Pratik Bhansali

Pratik Bhansali (Expert)
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09 November 2013 The limitation period is 1 year from relevant date (generally return date).

The said limitation of one year will be extended to five years to the department where any service tax has not been paid or has been short paid or short levied or erroneously refunded by reason of –
fraud; or
collusion; or
willful misstatement; or
suppression of facts; or
contravention of any of the provisions or the rules with intent to evade payment of service.

It will not be hit by limitation unless you prove that extended period cannot be applied which may be difficult.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2013 Mr Pratik Bhansali,

In this case, the filing of half yearly ST3 return period April 11 to Sep 11 was extended upto 20.01.2012 by way of notification. In the meanwhile, on 28.05.2012, the Dept has amended the (Finance Act) provision of limitation period to 18 months from 12 months. In the said query it is stated that the SCN is issued on 10.4.13.

Assuming that there is no fraud or suppression whether the dept can still issue SCN on 10.4.13 by using the amendment provision of 18 months? If it is one year, it is time-barred.

In my opinion the sCN shd have been issued on or before 19.01.2013 (i.e 20.01.12, revised return filing date, plus 1 year).

Experts, please throw some light on this point.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 In the context of Service Tax, the limitation period for issuing a Show Cause Notice (SCN) is an important aspect to understand. Here’s a detailed explanation based on the scenario you provided:

### **1. Limitation Period for Issuing SCN**

**1.1 Standard Limitation Period:**
- Generally, the limitation period for issuing a Show Cause Notice under the Service Tax regime is **12 months** from the relevant date. The relevant date is typically the date on which the service tax was due but not paid or the date when the return was filed.

**1.2 Amendments and Extensions:**
- According to your scenario, the Finance Act amendment changed the limitation period to **18 months**. This amendment was effective from 28.05.2012, which extended the limitation period for issuing SCNs.

### **2. Application of Limitation Period to Your Case**

**2.1 Scenario Details:**
- **Half-Yearly Return Period:** April 2011 to September 2011
- **Return Filed:** 25 October 2011
- **Extended Filing Date:** 20 January 2012
- **SCN Issued:** 10 April 2013

**2.2 Limitation Calculation:**
- The relevant date for limitation purposes would be **20 January 2012**, which is the extended date for filing the return.
- Under the old 12-month rule, the SCN should have been issued by **19 January 2013**.
- The Finance Act amendment extending the limitation period to 18 months was introduced on **28 May 2012**.

### **3. Application of the Extended Limitation Period**

**3.1 For Returns Filed Within Extended Period:**
- Since the Finance Act amendment increased the limitation period to 18 months from 12 months, it applies to cases where the relevant date falls within the period starting from the effective date of the amendment (28 May 2012) or after.

**3.2 SCN Issued Post Amendment:**
- Given that the SCN was issued on **10 April 2013**, which is well within the 18-month period from the extended filing date of **20 January 2012**, the SCN is not barred by the limitation period under the new 18-month rule.

### **4. Key Points to Consider**

**4.1 Applicability of the New Limitation Period:**
- The 18-month period applies to SCNs issued after the amendment, which covers your case since the SCN was issued after the effective date of the amendment.

**4.2 Transitional Provisions:**
- If the SCN had to be issued before the amendment (i.e., before 28 May 2012), the old 12-month rule would apply. However, as the SCN was issued after this date, the 18-month rule is applicable.

### **5. Conclusion**

**In Your Case:**
- Since the SCN was issued on **10 April 2013**, which is within 18 months from **20 January 2012** (the extended return filing date), the SCN is valid under the extended limitation period.

**For No Fraud or Suppression:**
- If there is no fraud or suppression, the limitation period extended to 18 months from the revised return filing date (20 January 2012) allows for the issuance of the SCN up to **19 July 2013** (considering the extended period).

### **Summary**

The SCN issued on **10 April 2013** falls within the 18-month period allowed under the Finance Act amendment effective from **28 May 2012**. Therefore, the issuance of the SCN is within the permissible time frame, and it is not time-barred.