2003 (8) TMI 3 - HC - Service Tax

Court Confirms Service Tax Obligations for Contract Carriage as 'Tour Operators' Under Finance Act 1994.

SRI PANDYAN TRAVELS Versus COMMISSIONER OF C. EX., CHENNAI-II

The Division Bench upheld the respondent's order, dismissing the writ petition filed by the contract carriage operator. The Bench determined that the ... Registration and payment of service tax - Contract Carriage operator covered under service tax? - HELD THAT:- It is not disputed that the questions such as contract carriage, stage carriage, tourist vehicle, as defined under the Motor Vehicles Act, 1988 and tour operator as per the Finance Act, 1994 have been elaborately considered in Secy Federn of Bus-operators Assn. of T.N. v. Union of India [2001 (4) TMI 7 - MADRAS HIGH COURT]. After considering all the contentions relating to recovery of service tax on tour operators, the Division Bench dismissed all the writ petitions upholding the legislative competence as well as the merits and applicability of the provisions of the Finance Act to the stage carriage operators, contract carriage operators, cab/maxi cab operators except spare buses vide para 36. Though Mrs. Radha Gopalan has argued that as per the Division Bench decision, the petitioner, who is a contract carriage operator, since their vehicle is not a tourist vehicle, the payment of service tax does not apply to the petitioner's case, in the light of the elaborate discussion by the Division Bench covering all the aspects, including the claim of the petitioner, I am unable to accept the said contention for the following reasons. In the light of the conclusion/observation of the Division Bench, I am of the view that as per Section 65(52) of the Finance Act and as interpreted by the Division Bench, the contract carriage vehicles are also covered under service tax. Since the petitioner is covered under the definition of 'tour operator' and doing the said business, the respondent is fully justified in issuing the impugned communication requesting the petitioner to register and pay service tax. I am also satisfied that the issue is already settled in view of the judgment of the Division Bench, referred to above and I hold that the petitioner herein is liable to pay the service tax. Thus, there is no merit in the Writ Petition and the same is dismissed. No costs. Consequently, connected miscellaneous petitions are closed. Issues involved: Challenge to the order of the Commissioner of Central Excise u/s C.No. IV/16/368/2001-STC dated 18-10-2002 directing registration and payment of service tax by Sri Pandyan Travels as a contract carriage operator.Summary:The petitioner, a contract carriage operator, challenged the imposition of service tax by the respondent, claiming they do not operate tourist vehicles as per the Motor Vehicles Act. The respondent argued that based on previous judgments, contract carriage vehicles are covered under service tax. The main issue was whether the petitioner qualifies as a 'Tour Operator' u/s the Finance Act, 1994.The Division Bench had previously dismissed writ petitions challenging the applicability of service tax to stage carriage operators, contract carriage operators, and cab/maxi cab operators, except spare buses. The Division Bench concluded that vehicles under tourist permits are covered by the Finance Act. The petitioner, being a contract carriage operator, falls under this category and is liable to pay service tax.The Division Bench's interpretation of Section 65(52) of the Finance Act includes contract carriage vehicles under service tax. As the petitioner is considered a 'tour operator' under the Act, they are required to register and pay service tax. The judgment upheld the respondent's order, dismissing the writ petition with no costs incurred.