Tour operator service tax liability fails where operators hold only contract carriage permits, not tourist permits.

Operators holding only a contract carriage permit were not treatable as tour operators for service tax purposes because the governing definition required operation of tours in a tourist vehicle conforming to the Motor Vehicles law and prescribed rules. Where the assessee lacked a tourist permit and the vehicle was not shown to meet the statutory tourist-vehicle requirements, the condition for taxability was not satisfied. The Revenue's cited authority was distinguished on the basis that it involved a tourist permit. The demand for service tax as tour operators was therefore unsustainable.

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Issues: Whether operators holding only a contract carriage permit, and not a tourist permit, could be treated as providers of tour operator service and made liable to service tax.

Analysis: The governing definition required the person to be engaged in operating tours in a tourist vehicle. A tourist vehicle, in turn, had to satisfy the specifications prescribed under the Motor Vehicles law and the relevant rules. The appellants held contract carriage permits and did not have tourist permits. The cited authority on which the Revenue relied was distinguished because, in that case, the assessee had a tourist permit. The reasoning accepted that the statutory condition was not met where the vehicle was only a contract carriage and not a tourist vehicle conforming to the prescribed requirements.

Conclusion: The appellants were not liable to service tax as tour operators, and the demand was unsustainable.

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