HC : Show cause notice alleging tax evasion intention mandatory, while invoking extended limitation

HC holds that show cause notice is mandatory for determining the disputed tax, interest and penalty and same cannot be collected for 5 years without alleging omission / commission of willful suppression, fraud, misrepresentation with intent to evade tax as enumerated under the proviso to Section 73(1) of Finance Act; Notes that pursuant to audit, the assessee, a cooperative bank, had provisionally paid CENVAT credit under protest along with interest and penalty; Rejects Revenue’s plea that no show cause notice is necessary when the assessee has paid tax and penalty upon ascertainment by Audit Enquiry Officer before service of notice u/s 73(1) of the Act; Referring to CBEC Instruction dated August 18, 2015 and provisions of Section 73(3), HC remarks, “extended period of limitation of five years is available only in cases where the omissions or commissions enumerated in proviso to Section 73(1) are alleged”; Relying on SC rulings, HC also quashes levy of penalty stating that show cause notice is mandatory where Section 78(1) is invoked  : Karnataka HC