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Judgment
The present appeal is directed against the impugned order dt. 06/12/2019 passed by the Commissioner of Central Tax (Appeals), Belgaum whereby
the appeal of the appellant was rejected.
Briefly the facts of the present case are that the appellant is engaged in rendering taxable services under the category of ‘Construction of
Residential Complex Service’. A show-cause notice dt. 02/11/2016 was issued to the appellant for the period from April 2013 to March 2015.
After following the due process, the matter was adjudicated and demand of Rs.30,02,528/- vide Order-in-Original dt. 23/08/2017 was confirmed.
Appellant filed appeal against the said order after making predeposit of Rs.2,30,000/- before the Commissioner(Appeals). The learned Commissioner
(Appeals) set aside the demand for the extended period of limitation and confirmed the demand for the normal period. Subsequently appellant filed a
claim for refund of predeposit of Rs.2,30,000/- before the Assistant Commissioner against which a show-cause notice dt. 22/03/2019 was issued
proposing to reject the said refund. After following the due process, the refund was rejected vide Order-in-Original dt. 30/04/2019. Aggrieved by the
said order, appellant filed appeal before the Commissioner (Appeals) which was rejected by the impugned order. Hence the present appeal.
Heard both sides and perused the records.
4.1. Learned consultant for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly
appreciating the facts and the law and the binding judicial precedent. He further submitted that the issue involved in the present case is whether the
normal period of limitation of 18 months is to be applied or 30 months to be applied for demanding service tax for the period 2014-2015 when show-
cause notice is issued after 14/05/2016. He further submitted that the activity occurred and the right accrued during the period 2014-15, hence the law
prevailing at that time has to be applied. For this submission, he referred to the decision of the Hon’ble Apex Court in the case of CIT Vs. Vatika
Township pvt. Ltd. [2014 367 ITR 466 (SC)] wherein it has been held as under:-
“…. ….. ….     unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective
operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of
the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow’s backward adjustment of
itâ€.
Further in para 36, it is held that “It would also be pertinent to mention that assessment creates a vested right and an assessee cannot be subjected
to reassessment unless a provision to that effect inserted by amendment is either expressly or by necessary implication retrospectiveâ€.
He also cites the decision of Four Judges Bench in the case of Govinddas & ors., etc. Vs. Income Tax officer & Another [1977 AIR 552, 1976 SCR
(3) 44], wherein it was held that Section 171(6) of the Income Tax Act to be prospective and inapplicable for any assessment year prior to 1st April,
1962. Since the amendment made in Section 73(1) is relating to assessment, the same cannot be having retrospective effect and should be treated as
having only prospective effect.
4.2. Learned consultant further submitted that in any case, demand for the period April 2014 to September 2014 where the due date for filing the
returns had lapsed on 14/11/2014 and due date to issue notice lapsed on 13/05/2016 whereas the amendment was effective from 14/05/2016; hence on
the date of amendment, the limitation period had already lapsed. He further submitted that the new law cannot give life to the dead case. In this
regard, he placed reliance on the decision in the case of Aveco Technologies Pvt. Ltd. Vs. CC, Hyderabad [2018(362) ELT 624 (Tri.)], wherein, on
similar amendment made effective from the same day under the Customs Act, where the limitation period was extended from 1 year to 2 years, it was
held that the amendment is not retrospective and therefore the notice issued on 08/11/2016 cannot extend the time limit from 1 year to 2 year. Civil
Appeal against the said order was dismissed by Hon’ble Supreme Court as reported in Commissioner Vs. Aveco Technologies Pvt. Ltd.
[2018(362) ELT A164 (SC)]. He further submitted that while passing the impugned order, the learned Commissioner (Appeals) ignored the aspect
that the amendment cannot be given retrospective effect.
On the other hand, the learned AR reiterated the findings of the impugned order and submitted that in the present case, show-cause notice was
issued on 02/11/2016 extending period from 18 months to 30 months for issuing the show-cause notice and therefore the Revenue has rightly invoked
the period to 30 months for confirming the demand of service tax for the period 2014-15.
6.1. After considering the submissions of both sides and perusal of the material on record, I find that the only issue involved in the present case is
whether the normal period of limitation of 18 months to be applied or 30 months to be applied for demanding service tax for the period 2014-15 when
the show-cause notice is issued after 14/05/2016. Further I find that this issue is squarely covered by the decision of the Division Bench of this
Tribunal in the case of Aveco Technologies Pvt. Ltd. cited supra wherein in para 15, the Division Bench has held as under:-
We also find that a part of the demand raised in the Notice is barred by limitation. The Commissioner has held in the order that the
larger period of limitation available under the proviso to Section 28 is not invocable in the present case as there was no deliberate
suppression or misstatement. He has therefore confined the demand for a period of the normal period of limitation. He has however applied
two years to be the normal period of limitation and, since the show cause notice was issued on 8-11-2014, all imports made after 8-11-2014
have been held to be falling within the normal period of limitation. The appellant has contested this approach by pointing out that demands
for the period from 8-11-2014 till 13-5-2016 was time-barred and therefore could not have been the subject matter of the recovery
proceedings. It was pointed out that the normal period of limitation was enhanced from one year to two years with effect from 14-5-2016.
This was done by an amendment made to the Customs Act by Finance Act, 2016. The position thus was that as on 13-5-2016 i.e. prior to the
Finance Act, 2016 coming into force, demand for the period prior to 13-5-2015 had already become barred by limitation. This amendment
made was not professedly a retrospective one and thus demands which had already become barred by limitation could not get revived by the
amendment. Thus, demands for the period 8-11-2014 till 13-5-2015 which had already become time-barred could not have been confirmed
by the Commissioner by applying the amended period of two years. The fact that the Notice had been issued on 8-11-2016, by which time
the limitation period had increased to two years, could not give the Revenue an authority to revive and resurrect demands which had
already become dead before the amendment. To do so, would be to give the amended provision a retrospective effect which the Legislature
did not do while bringing in the amendment. It is a settled law that any statutory amendment is prospective in its operation unless it is
specifically declared to have retrospective operation. The Finance Act, 2016 does not contain any provision according to a retrospective
operation to the said Act. As such, demands which had already become irrecoverable as on 13-5-2015 could not, by virtue of the
amendment with effect from 14-5-2016 get resurrected or revived.
6.2. Further I find that this decision of the Division Bench has been upheld by the Apex Court as reported in 2018(362) ELT A164 (SC). Further I find
that on the date of amendment which was effective from 14/05/2016, the limitation period for April 2014 to September 2014 has already lapsed and
the subsequent amendment cannot give life to the dead case as held by the Division Bench of this Tribunal in Aveco Technologies Pvt. Ltd. and
upheld by the Apex Court cited supra.
By following the ratio of the above said decision, I am of the view that confirmation of demand for the period April 2014 to September 2014 is bad
in law and therefore, I set aside the demand for the said period. As far as demand for the period October 2014 to March 2015, the matter is remanded
back to the original authority for quantification of the demand and adjusting the demand against the mandatory predeposit and after doing the same, the
remaining amount will be refunded to the appellant, if any. Appeal is accordingly partially allowed and partially remanded.
(Order was pronounced in Open Court on 02/08/2021)