When there is no mens rea, no demand will sustain on ground of limitation

Last updated: 19 May 2023
Quick Summary
The CESTAT Kolkata has ruled that a demand for service tax and penalties beyond the normal limitation period is invalid if there's no evidence of 'mens rea', meaning an intent to evade tax. In this case, an ex-servicemen welfare organisation was found to have not suppressed information when filing their returns, despite excluding certain reimbursements from taxable value. Therefore, the extended period of limitation could not be invoked, and the demand and penalty were set aside.

Court :
CESTAT, Kolkata

Brief :
The CESTAT, Kolkata in M/s. Bhootpurva Sainik Kalyan Sangh v. Commissioner of Central Excise & Service Tax [Service Tax Appeal No.566 of 2011 dated May 11,2023] held that, there should be mens rea to evade payment of service tax for demand of service tax and penalty beyond period of limitation.

Citation :
Service Tax Appeal No.566 of 2011 dated May 11,2023

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Bimal Jain
Published in GST
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