Service tax recovery under the wrong notice provision failed where the applicable statutory machinery did not cover the assessee class.

Goods transport service tax liability for the relevant period could not be recovered where the show cause notice was issued under a recovery provision that did not validly cover the class of persons concerned on that date. The dispute concerned the interaction between the return-filing obligation under Section 71A and Rule 7A and the later substitution of Section 73. Following the earlier view that such notices were not maintainable under Section 73 as it then stood, and noting that view had been upheld by the Supreme Court, the demand for service tax and interest was treated as unsustainable and the departmental challenge failed.

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Issues: Whether the demand for service tax and interest on goods transport service for the relevant period was sustainable in law in view of the statutory scheme governing liability, return filing, and recovery.

Analysis: The levy on goods transport service underwent successive amendments, including the insertion of a return-filing obligation under Section 71A and Rule 7A, and the later substitution of Section 73. The dispute turned on whether a show cause notice issued before the later amendment could validly sustain recovery against persons covered by Section 71A. Following the earlier decision that notices issued in such a situation were not maintainable under Section 73 as it then stood, and noting that the earlier view had been upheld by the Supreme Court, the demand for tax and interest could not be sustained.

Conclusion: The demand for service tax and interest was held to be unsustainable and the issue was decided in favour of the assessee.

Final Conclusion: The statutory recovery for the disputed period failed for want of a valid sustainable notice under the applicable service tax framework, and the department's appeal was rejected.

Ratio Decidendi: Where the return-filing obligation and the recovery provision do not validly cover the class of persons concerned on the date of notice, a demand issued under the inapplicable recovery machinery cannot be sustained.

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