Binding Supreme Court precedent bars revival of service tax demand on goods transport recipients without a stay.

Recipients of goods transport operator service could not be subjected to a revived service tax demand and equal penalty once the governing law had been settled by the Supreme Court. The Tribunal noted that the earlier view in L. H. Sugar Factories Ltd. had held such assessees outside section 73 of the Finance Act, 1994 for demand purposes, and that no stay had been granted merely because similar matters were later admitted in appeal. A revisional authority could not ignore binding precedent on that basis. The revisional order was therefore unsustainable, and the demand and penalty did not survive.

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Issues: Whether the revisional order restoring service tax demand and equal penalty on goods transport operator service recipients was sustainable when the legal position on such liability had already been settled by the Supreme Court.

Analysis: The liability of recipients of goods transport operator services was originally struck down as ultra vires section 66 of the Finance Act, 1994. Although subsequent amendments, including insertion of section 71A and changes brought by the Finance Act, 2000, dealt with the subject, the Tribunal in L. H. Sugar Factories Ltd. held that persons covered by section 71A still did not fall within section 73 of the Finance Act, 1994 for the purpose of a demand notice. That view had been upheld by the Supreme Court, and no stay was operating merely because later civil appeals on similar issues had been admitted. On the date of the revisional notice, the governing law therefore remained the law declared in L. H. Sugar Factories Ltd., making the revision unnecessary.

Conclusion: The revisional order was unsustainable and was set aside; the demand and penalty did not survive.

Ratio Decidendi: Where the Supreme Court has settled the governing legal position and no stay has been granted, a revisional authority cannot disregard that binding law merely because similar matters have been admitted in appeal; a demand under section 73 of the Finance Act, 1994 must fail if the assessees are outside its scope.

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