Tour operator classification under service tax upheld where contract carriages were used to operate trips and tours, not merely hired out.

Contract carriage operators using vehicles for marriage parties, excursions and group trips were held liable as "tour operators" under the Finance Act, 1994 because the factual record showed they were operating trips and tours through their own staff, including the driver, rather than merely hiring out vehicles. The statutory definition covered persons engaged in operating tours in a tourist vehicle or contract carriage, and the earlier writ judgment had only required proper enquiry into the actual activity. As the authorities' factual conclusion was neither perverse nor illegal, interference was unwarranted and the service tax demand was sustained.

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Issues: Whether the petitioners, who operated contract carriages and used them for marriage parties, excursions and group trips, were liable to service tax as "tour operators" under the Finance Act, 1994.

Analysis: The impugned order recorded a factual finding that the vehicles were not merely let out on hire, but were operated for trips and tours by the assessee's staff, including the driver. The statutory definition of "tour operator" covered a person engaged in the business of operating tours in a tourist vehicle or contract carriage. The earlier writ judgment only required enquiry and adjudication on the petitioners' actual activity and did not finally immunise them from tax. As the authorities had examined the facts and concluded that the petitioners were operating tours rather than merely hiring out vehicles, there was no perversity or illegality warranting interference.

Conclusion: The petitioners were liable to be treated as tour operators and the service tax demand was sustained.

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