Non-banking financial company status for service tax depends on principal business, not registration alone.

A company cannot be treated as a non-banking financial company for service tax purposes merely because it holds a registration certificate; the statutory definition also requires that its principal business during the relevant period be receiving deposits or lending money. The material before the authority did not conclusively establish that factual requirement, and the show cause notice itself left that issue for examination on the basis of the information gathered and the company's reply. Liability therefore could not be fixed solely on the certificate, and the adjudicating authority was required to determine the principal-business question in accordance with law after considering the objections.

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Issues: Whether the petitioner could be treated as a non-banking financial company for service tax purposes merely because it held a certificate of registration; and whether liability under the relevant service tax provisions depended on proof that its principal business during the relevant period was receiving deposits or lending.

Analysis: The definition of a non-banking financial company required more than the mere existence of a registration certificate. It required that the company, in addition, have as its principal business the receiving of deposits or lending of money. The material before the Authority did not conclusively establish that the petitioner satisfied that principal business requirement for the relevant period. The show cause notice itself indicated that this factual aspect needed examination on the basis of the information gathered and the petitioner's reply. The writ court therefore declined to hold, at that stage, that the petitioner fell within the taxable category solely on the basis of the registration certificate.

Conclusion: The petitioner could not be fastened with service tax liability merely on the strength of the registration certificate alone, and the factual question whether its principal business satisfied the statutory definition had to be determined by the adjudicating authority.

Final Conclusion: The writ petition was disposed of by leaving the petitioner at liberty to submit an additional reply and by directing the authority to decide the matter in accordance with law after considering the petitioner's objections.

Ratio Decidendi: A company cannot be treated as a non-banking financial company for tax liability purposes unless, in addition to holding registration, it is shown that its principal business is the receiving of deposits or lending of money.

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