Consignment note requirement determines Goods Transport Agency status and reverse charge service tax liability on road transport services.

Issuance of a consignment note is a mandatory ingredient for constituting a Goods Transport Agency; without it, transport contractors carrying goods by road do not fall within goods transport agency service. The statutory scheme therefore does not fasten service tax on the recipient under reverse charge mechanism where the transporter merely carries goods without issuing a consignment note, even if the service is otherwise transportation of goods. The Tribunal followed its earlier view on this point and distinguished the Supreme Court decision relied upon by Revenue as not deciding the mandatory nature of the consignment note requirement.

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Issues: Whether transport contractors who do not issue consignment notes can be treated as a Goods Transport Agency so as to fasten service tax liability on the recipient under reverse charge mechanism.

Analysis: For the material period, taxability depended upon the service falling within the statutory definition of taxable service and the provider satisfying the definition of Goods Transport Agency. The statutory scheme treated issuance of a consignment note, by whatever name called, as an essential element of that definition. Where transporters merely carried goods without issuing consignment notes, the service did not answer the description of goods transport agency service. The earlier Tribunal view on the same point was followed, and the Supreme Court decision relied upon by Revenue was held not to have decided this specific issue of the mandatory nature of consignment note for constituting a Goods Transport Agency.

Conclusion: The transport contractors were not Goods Transport Agencies, and the recipient was not liable to service tax under reverse charge mechanism on the impugned transportation services.

Ratio Decidendi: Issuance of a consignment note is a mandatory ingredient for constituting a Goods Transport Agency, and in its absence transportation of goods by road does not fall within the taxable category of goods transport agency service.

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