Statutory functions for a transport authority do not amount to business auxiliary service under service tax law.

Services performed for a Transport Department in discharge of statutory functions under the Motor Vehicles Act were not business auxiliary service under section 65(19) of the Finance Act, 1994. Establishing service centres in public offices and carrying out statutory duties did not amount to customer care, promotion or marketing of services, or any incidental auxiliary support activity. Services rendered to public authorities in the course of statutory functions fall outside the taxable category unless they satisfy the statutory definition of taxable support or promotion. The assessee's position was therefore upheld and the revenue's appeal failed.

---

---

Issues: Whether the respondent's activities for the Transport Department constituted "business auxiliary service" chargeable to service tax under section 65(19) of the Finance Act, 1994.

Analysis: The work undertaken was for the discharge of statutory functions of the Transport Department under the Motor Vehicles Act and involved establishment of service centres in public offices. Such activity did not amount to customer care, promotion or marketing of services, or any incidental or auxiliary support service. The Tribunal's view was consistent with the understanding that services rendered while performing statutory duties for public authorities do not fall within the taxable category of business auxiliary service.

Conclusion: The activity was not taxable as business auxiliary service and the finding in favour of the assessee was upheld.

Final Conclusion: No substantial question of law arose, and the revenue's appeal failed.

Ratio Decidendi: A service rendered in discharge of statutory functions for a public authority does not, by that reason alone, constitute business auxiliary service unless it answers the statutory definition of taxable support, promotion, or customer-care activity.

---