Tour operator deemed liable for service tax demand and penalty under Finance Act

The court upheld the assessing authority's decision confirming service tax demand and penalty against the petitioner for operating tours on vehicles owned by them, deeming them a tour operator subject to service tax liability. The court found the petitioner's activities extended beyond mere vehicle hire, involving staff in tour operations, thus falling within the definition of a tour operator under the Finance Act, 1994. The writ petition challenging the order was dismissed as the court deemed the authority's decision lawful and supported by factual findings.

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Issues:
Challenge to order confirming service tax demand, penalty, and seeking a declaration of non-exigibility for service tax liability.

Analysis:
1. The petitioner challenged Ext.P14 order confirming a demand for service tax and penalty for financial years 2004-05, 2005-06, and 2006-07, seeking a declaration of non-exigibility for service tax liability.
2. The petitioner claimed to be engaged in letting contract carriage vehicles on hire, contending they were not providing any service other than vehicle hire.
3. Previous legal proceedings involved directions from the High Court regarding service tax liability for vehicle owners letting out vehicles on hire.
4. The assessing authority held the petitioner liable as a tour operator under the Finance Act, 1994, based on the operation of tours using contract carriages.
5. The respondent argued that the petitioner's activities fell within the definition of a tour operator, thus subject to service tax liability.
6. Ext.P14 order found the petitioner operating tours on vehicles owned by them, not merely hiring out contract carriages, leading to service tax liability.
7. The court noted the assessing authority's findings that the petitioner's staff operated tours, indicating service provision beyond mere vehicle hire.
8. The court upheld the authority's decision, stating it was based on relevant facts and not illegal or perverse, dismissing the writ petition challenging Ext.P14 order.

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