Tour operator service tax requires tourist vehicles and a valid permit; absent both, liability does not arise.

Taxability as a tour operator under the Finance Act, 1994 depends on proof that the assessee operates tours in a tourist vehicle and holds the requisite tourism-related permit. Where the record does not establish that the buses used were tourist vehicles or that any such permit was granted, the statutory ingredients for classification as a tour operator service are not met, and service tax liability does not arise. The settled position is that vehicles not answering the description of tourist vehicles under the Motor Vehicles Act and the relevant rules cannot be brought within this taxable category.

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Issues: Whether the appellant's activity of carrying employees in contract carriage buses amounted to taxable tour operator service under the Finance Act, 1994.

Analysis: Liability under the definition of tour operator depended on the assessee being engaged in the business of operating tours, using a tourist vehicle, and holding a permit for tourism-related operation. The record did not establish that the buses were tourist vehicles or that any relevant permit had been granted. In the absence of evidence satisfying these statutory elements, the service could not be brought within the taxable category. The conclusion was supported by the settled view that vehicles not answering the description of tourist vehicles under the Motor Vehicles Act and the corresponding rules do not attract registration as tour operator service under the finance statute.

Conclusion: The issue was answered in favour of the assessee and against the Revenue.

Ratio Decidendi: To tax an operator as a tour operator, the statutory ingredients of operating tours in a tourist vehicle covered by the requisite permit must all be satisfied; if the vehicles are not tourist vehicles and no such permit is shown, service tax liability does not arise.

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