Supreme Court Refuses To Entertain Service Tax Appeal By Principal Commissioner Of CGST And Central Excise Jaipur Against RSRTC.
Case Overview
An appeal by Principal Commissioner of CGST and Central Excise, Jaipur (hereinafter referred to as “Appellant”) titled as THE PRINCIPAL COMMISSIONER OF CENTRAL EXCISE AND CGST JAIPUR VERSUS M/S RAJASTHAN STATE ROAD TRANSPORT CORPORATION (hereinafter referred to as “Respondent”) was dismissed by Hon’ble Supreme Court of India on 28 February 2019, in case where Appellant had challenged the order dated 6th January 2017 passed by Custom, Excise and Service Tax Appellate Tribunal (hereinafter referred to as “Tribunal”) in Appeal No. 1940 of 2016-SV pertaining to service tax demands exceeding to Rs. 16 Crores.
Tribunal’s Findings
The Appellate Tribunal, inter alia, held and observed in its order dated January 6, 2017, on appeal filed by RSRTC, that RSRTC was carrying services of bus between places like Jaipur to Delhi as well as between places within the State of Rajasthan in collaboration with RTDC but these would not amount to an organized tour service as they involved transportation of passengers under separate contracts and on payment of fare for each travel.
“Thus if a vehicle only carries passengers from place to place on fare fixed for each individual without any common contract amongst them, it would amount to conveyance of passengers and would not constitute an organized tour service.
Advocate N Venkatarman who argued the case for petitioner RSRTC stated that as a transporter of passengers and goods by road, the services rendered by RSRTC did not fall within the definition of a ‘tour operator’. Appellant sought intervention of Supreme Court in matter of classification of services of a transporter of passengers and goods by road and imposition of service tax on such services. However Supreme Court declined to intervene in the matter as it did not find any case in the matter.
Partial Victory for RSRTC
However, this verdict is not in full measure for RSRTC as CESTAT had already confirmed the service tax as well as the license fee etc. of RSRTC which were within limitation period and were raised by the dept. on the ground of suppressed facts. These demands were never contested by RSRTC before the tribunal and hence were remanded back to the original authority for computation of amount due.
Legal Representation
N Venkatarman and A.S.G led a team of senior advocates including Gurmeet Singh Makker, Nisha Bagchi, Padmesh Mishra, Madhav Sinhal and Karunakar Mahalik for the petitioner in the said case.
Conclusion
This CESTAT decision shall now hereafter be a case in point in service tax cases related to public transport service providers to know as to how a service tax provider in such cases would be classified and how service tax in relation to such a service tax provider would be applied in a case.
Case Details:
Title: THE PRINCIPAL COMMISSIONER OF CENTRAL EXCISE AND CGST JAIPUR VERSUS M/S RAJASTHAN STATE ROAD TRANSPORT CORPORATION
Read latest Tax blog updated with latest Tax laws, Tax rates on tax law and transport services.