Siddartha Travels vs CGST: Patna HC on Section 73(1) Limitation

Siddartha Travels, a travel agency based in Patna, challenged a service tax demand notice before the Patna High Court, arguing that both the show cause notice and the consequent adjudication order were issued beyond the permissible limitation period under Section 73(1) of the Finance Act, 1994. The case is significant for the GST and indirect-tax research community because it examines the conditions under which the extended five-year limitation period — as opposed to the standard twelve-month period — can lawfully be invoked when the department alleges suppression of facts with intent to evade tax.

This page is a research summary of one specific Indian tax judgment, NOT legal advice. Always verify against the full judgment and consult a professional for case-specific guidance.

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The case at a glance

• Parties: Siddartha Travels vs Principal Commissioner Of Cgst And
• Bench: Patna High Court
• Date: 24 April 2025
• Court level: High Court
• Sections engaged: 73(1)
• Outcome: Revenue succeeded

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Facts of the case

Siddartha Travels, a proprietorship concern run by Anil Kumar and having its registered office at Block-C/119, Maurya Lok Complex, Patna, operated as a travel agency. It received money from customers on account of sale of tickets and earned commission on the booking of travel tickets. For the financial years 2015-16 and 2016-17, Respondent No. 3 — the Assistant Commissioner of CGST and Central Excise, Patna — issued a demand-cum-show cause notice dated 17 October 2020, calling upon the petitioner to show cause why a demand for payment of service tax amounting to Rs. 25,25,313/-, along with an equivalent penalty and interest, should not be imposed. The department assessed service tax liability on the gross value of services as declared in the petitioner's Income Tax Return (ITR) for the relevant period, having cross-referenced data received from the Income Tax Department.

Prior to issuing the notice, the department made multiple attempts to obtain documents and information from the petitioner. A letter dated 3 December 2019 sent to the petitioner's address was returned undelivered by the postal authority with the remark "LEFT." Subsequent letters dated 13 August 2020 and a reminder dated 1 October 2020, sent to the new address reflected on the GST portal, were similarly returned undelivered. The same letters were also sent to the petitioner's registered e-mail ID; despite all these attempts, the petitioner neither submitted a reply nor provided any relevant documents. The show cause notice was accordingly issued on the basis of available ITR data.

Respondent No. 2 — the Deputy Commissioner of CGST and Central Excise, Ranchi — thereafter confirmed the demand of service tax of Rs. 25,25,313/- along with interest and an equivalent penalty by an order dated 4 July 2024, recorded as Annexure 'P-4'. The petitioner filed Civil Writ Jurisdiction Case No. 13297 of 2024 before the Patna High Court, seeking to set aside both the show cause notice and the adjudication order.

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Issues raised

• Whether the demand-cum-show cause notice dated 17 October 2020 for financial years 2015-16 and 2016-17 was barred by the twelve-month limitation prescribed under the proviso to Section 73(1) of the Finance Act, 1994.
• Whether the adjudication order dated 4 July 2024 was passed beyond the period prescribed under clause (b) of Sub-Section (4B) of Section 73 of the Finance Act, 1994.
• Whether the petitioner's conduct amounted to suppression of facts with a wilful intent to evade payment of service tax, so as to justify invocation of the extended five-year limitation period.
• Whether the service tax liability of the petitioner, as a travel agency, was limited to commission received on booking of tickets (after applicable abatements) rather than the gross value of services as reflected in the ITR.

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What the court held

The Patna High Court disposed of the writ application without interfering with the demand-cum-show cause notice or the adjudication order, upholding the department's position. The court found no reason to set aside either the notice or the confirmed demand.

On the factual matrix, the court took note of the uncontroverted statements in the department's counter affidavit, including the petitioner's non-response to all correspondence sent to both the old address, the new GST-portal address, and the registered e-mail ID. The court also noted, from the order at Annexure 'P-4', that the petitioner had been changing its stand before the departmental authority — initially claiming in its written reply to the show cause notice that M/s Siddhartha Travels and Shri Anil Kumar were separate entities despite both sharing the same Permanent Account Number (PAN).

The petitioner had relied on a coordinate bench ruling in M/S Kanak Automobiles Private Limited Versus The Union of India and Others (CWJC No. 18398 of 2023), where an order was quashed for being passed beyond the one-year period, and on the Supreme Court's ruling in Union of India Versus Rajasthan Spinning and Weaving Mills reported in (2009) 13 SCC 448, for the proposition that the extended limitation period of five years is available only where the escaped tax results from conscious and deliberate wrongdoing. The petitioner also relied on a recent coordinate bench ruling in M/S Power Spectrum Sarbidipur, Kahalgaon, Bhagalpur Versus The Union of India and Another decided on 17 April 2025 (CWJC No. 16772 of 2024), in which the bench held that the period under Section 73(4B) cannot be extended for an inordinate duration. The court, on the facts presented — including the pattern of non-response, inconsistent positions, and the basis on which the department cross-referenced ITR data — upheld the department's view that the extended period had been lawfully invoked, and declined to interfere.

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Strategy observations

1. An additional dimension of the petitioner's case rested on a CBIC Circular dated 13 December 2023 (F. No. CBIC-20004/3/2023-GST), which the petitioner's counsel cited before the court. The Circular, issued in the context of the Supreme Court's ruling in C.C., C.E. and S.T. Bangalore (Adjudication) and Others vs. Northern Operating Systems Private Limited reported in (2022) 17 SCC 90, states that the provisions of Section 74(1) of the CGST Act, 2017 — the equivalent extended-period provision in the GST regime — should be invoked only where material evidence of fraud, wilful mis-statement, or suppression of fact to evade tax is present and forms part of the show cause notice itself. The court had this submission on record but nonetheless declined to interfere, with the departmental conduct of documenting all undelivered notices playing a material role in the factual matrix.

2. Three Supreme Court and High Court precedents on limitation — Rajasthan Spinning and Weaving Mills (2009) 13 SCC 448, the coordinate bench ruling in Kanak Automobiles (CWJC 18398/2023), and Power Spectrum Sarbidipur (CWJC 16772/2024, decided just a week before this judgment) — were placed before the court, yet the outcome turned substantially on the uncontroverted factual record of the petitioner's non-engagement with departmental correspondence and the internally inconsistent positions taken during adjudication.

3. The department's reliance on ITR data cross-furnished by the Income Tax Department, in the absence of any documents or reply from the petitioner, was accepted as a valid basis for quantifying service tax liability. This illustrates that where a taxpayer does not engage during the investigation and adjudication stages, the department may proceed on the basis of data available from other governmental sources.

4. The petitioner's position — that service tax as a travel agency was limited to commission received on ticket bookings after abatement, and not on the gross value of ticket sales — was a substantive legal argument, but the court's ultimate refusal to interfere suggests that this merits-based contention did not dislodge the jurisdictional and factual basis on which the department had proceeded, particularly given the conduct-related findings in the adjudication order.

5. The case was decided as a CAV (Curia Advisari Vult) judgment by a division bench comprising Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey, with the lead opinion authored by Justice Rajeev Ranjan Prasad.

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Why this case matters

This judgment is a useful data point for indirect-tax researchers examining the boundary between the standard twelve-month limitation and the extended five-year limitation under Section 73(1) of the Finance Act, 1994, and its functional analogue in the GST regime. The Patna High Court's refusal to interfere — even when the petitioner produced multiple Supreme Court and High Court precedents narrowing the extended-period window — underscores that the factual record of a taxpayer's conduct during investigation (pattern of non-response, changing positions, reliance on different entity characterisations) can decisively influence a writ court's exercise of discretion, separate from the pure legal question of limitation.

The case is also notable for the interplay between the pre-GST service tax framework under the Finance Act, 1994, and the post-GST enforcement environment. The show cause notice relates to financial years 2015-16 and 2016-17, placing it squarely in the pre-GST period, while the adjudication order was passed in July 2024 — illustrating the long tail of legacy service tax disputes that continue to be litigated before writ courts well into the GST era. Researchers tracking the judicial treatment of the suppression-of-facts ground across both regimes will find this judgment a relevant cross-reference.

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Source

This case is drawn from the TaxNoticeAI structured legal corpus (16,101 Indian tax judgments, CBIC circulars, ITAT rulings, AAR rulings, GSTAT rulings), sourced from indiankanoon.org and official court portals. Original document: https://indiankanoon.org/doc/4152663/