Service tax liability on service recipients depends on clear statutory authority; earlier-period demand for transport services was unsustainable.

Service tax could not be demanded from the recipient of goods transport operator services for the relevant earlier period because the liability originally rested on the service provider, and the recipient's liability was introduced only by later amendments to sections 68 and 71A of the Finance Act, 1994. For that period, the statutory scheme did not clearly fasten default on the assessee or authorise the demand raised under section 73 as then applicable, so the Tribunal's conclusion that the demand was unsustainable was upheld. No interference was warranted on the ground that the Tribunal's order was cryptic, as no substantial question of law arose.

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Issues: Whether service tax could be demanded from the recipient of goods transport operator services for the relevant period, and whether the Tribunal's order warranted interference on the ground of limitation or legal infirmity.

Analysis: The liability to pay service tax originally rested on the provider of the taxable service, and the recipient's liability was introduced only by later amendments to section 68 and section 71A of the Finance Act, 1994. Even though section 73 was subsequently substituted with effect from 10.09.2004, the Court held that, for the earlier period in question, the statutory scheme did not permit the demand as raised. In the absence of clear statutory language fastening default on the assessee for that period, the Tribunal's conclusion that the demand was not sustainable did not suffer from any infirmity. The Court also found no basis to interfere on the ground that the Tribunal's order was cryptic, since no substantial question of law arose from the impugned decision.

Conclusion: The demand against the assessee was not sustainable for the relevant period, and the Tribunal's order called for no interference.

Ratio Decidendi: A service tax demand on the recipient for an earlier period cannot be sustained unless the statute clearly fastens such liability and authorises recovery for that period under the governing provision.

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