Service tax on Goods Transport Operator services was unsustainable for the pre-amendment period under the Finance Act framework.

Service tax on Goods Transport Operator services could not be demanded from the recipient for a period before the relevant substitution in Section 73 of the Finance Act, 1994, because the retrospective changes introduced by the Finance Act, 2003 did not by themselves create an effective recovery mechanism for that earlier period. Applying the scheme of Sections 68, 71A and 73, the settled position was that liability could not be fastened on the assessee in the absence of a workable charging and recovery provision. The demand was therefore unsustainable and the assessee succeeded.

---

---

Issues: Whether service tax on Goods Transport Operator service could be demanded from the service recipient for a period prior to the relevant amendment, and whether the retrospective changes introduced by the Finance Act, 2003 could sustain the demand.

Analysis: The demand related to Goods Transport Operator service received during an earlier period. The legal position had already been settled that, before the substitution of the relevant provisions in Section 73 of the Finance Act, 1994, the retrospective amendments introduced by the Finance Act, 2003 by themselves did not authorise recovery of service tax from the recipient for the disputed period. The binding precedent applied the scheme of Sections 68, 71A and 73 of the Finance Act, 1994 and held that the liability could not be fastened on the assessee in the absence of a workable charging and recovery provision for that period.

Conclusion: The demand was not sustainable and the assessee succeeded.

---