Section 73 notice cannot be used against persons covered only by Section 71A under the service tax framework.

Service tax recovery for the period 16-11-1997 to 1-6-1998 turned on the retrospective amendments to the Finance Act, 1994 and the scope of the demand machinery. The controlling principle applied was that Section 73 applies only to persons liable to file returns under Section 70, while assessees covered solely by Section 71A fall outside that provision. On that basis, the show-cause notice was held not maintainable and the demand could not be sustained against the recipient.

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Issues: Whether service tax could be recovered from the service recipient for the period 16-11-1997 to 1-6-1998 after the retrospective amendments to the Finance Act, 1994, and whether a show-cause notice issued under Section 73 of the Finance Act, 1994 was maintainable against persons covered only by Section 71A of the Finance Act, 1994.

Analysis: Service tax on goods transport operator service was introduced for the relevant period and was later exempted from 2-6-1998. The levy on the user was invalidated by the Supreme Court, following which retrospective amendments were made to Sections 65, 66 and 67 of the Finance Act, 1994 and Rule 2 of the Service Tax Rules, 1994 through the Finance Act, 2000 and the Finance Act, 2003. The controlling principle applied was that Section 73 applies only to assessees liable to file returns under Section 70, whereas the persons covered by Section 71A were not brought within Section 73.

Conclusion: The show-cause notice was not maintainable and the demand could not be sustained against the appellant.

Ratio Decidendi: A notice under Section 73 of the Finance Act, 1994 is not maintainable against a person whose return-filing obligation arises only under Section 71A of the Finance Act, 1994.

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