Consignment note requirement limits GTA taxation; own-truck transport escapes service tax, and extended limitation fails without proof of evasion.

Transportation of goods by own trucks without issuance of consignment notes was held outside the taxable Goods Transport Agency category, so those receipts were not liable to service tax; consignments covered by goods receipts remained liable, if at all, under reverse charge under the applicable notification. The extended period of limitation could not be invoked for the demand because the notice was issued beyond five years for part of the period and the record showed no positive evidence of fraud, suppression of facts or intent to evade tax. A notice based only on third-party income-tax data, without independent verification and pre-show cause consultation, was treated as procedurally infirm. Interest and penalty fell with the unsustainable tax demand.

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Issues: (i) whether transportation of goods by the assessee using its own trucks without issuance of consignment notes was taxable as Goods Transport Agency service and whether receipts covered by consignment notes were liable under reverse charge; (ii) whether the demand for the financial year 2015-16 was barred by limitation for want of fraud, suppression or intent to evade tax; (iii) whether the demand could be sustained when the show cause notice was issued only on third-party income-tax data and without pre-show cause consultation, and whether interest and penalty survived.

Issue (i): whether transportation of goods by the assessee using its own trucks without issuance of consignment notes was taxable as Goods Transport Agency service and whether receipts covered by consignment notes were liable under reverse charge.

Analysis: The statutory definition of Goods Transport Agency service requires issuance of a consignment note. Where transportation is undertaken by own trucks and no consignment note is issued, the activity does not fall within the taxable GTA category and is covered by the negative list for transportation of goods by road. For consignments where GRs were issued, the record showed a clear notation that service tax was payable by the consignor or consignee under the reverse charge notification, and no contrary evidence was produced by the Revenue. The assessee's Chartered Accountant certificates and affidavits were accepted as supporting the breakup of receipts and the nature of the transactions.

Conclusion: Receipts from transport through own trucks without consignment notes were not liable to service tax, and the receipts covered by consignment notes were liable, if at all, under reverse charge in terms of the applicable notification. The assessee succeeds on this issue.

Issue (ii): whether the demand for the financial year 2015-16 was barred by limitation for want of fraud, suppression or intent to evade tax.

Analysis: The show cause notice was issued in December 2020 for a period ending in March 2016. The Tribunal held that the period up to October 2015 was beyond five years and could not be covered. For the remaining period, the record disclosed only general allegations and no positive evidence of fraud, suppression of facts or intent to evade payment of tax. In the absence of such material, the extended period could not be invoked.

Conclusion: The demand was barred by limitation to the extent it related to the period beyond five years, and the extended period was unavailable for the balance period as well. This issue is decided in favour of the assessee.

Issue (iii): whether the demand could be sustained when the show cause notice was issued only on third-party income-tax data and without pre-show cause consultation, and whether interest and penalty survived.

Analysis: The notice was founded on third-party income-tax data and not on independent examination of the assessee's books and records. The Tribunal treated the absence of pre-show cause consultation, in a case involving a demand exceeding the prescribed threshold, as a serious procedural lapse that strengthened the assessee's challenge. Since the primary demand was unsustainable on merits and limitation, the consequential levy of interest and penalty could not stand.

Conclusion: The proceedings were not sustainable on this footing, and the demands of interest and penalty also failed. This issue is decided in favour of the assessee.

Final Conclusion: The impugned order was set aside because the service tax demand failed both on merits and on limitation, and the consequential interest and penalty also could not survive.

Ratio Decidendi: For goods transport, issuance of a consignment note is essential to classify the service as Goods Transport Agency service, and in the absence of such note transportation by own vehicles falls outside the taxable GTA category; an extended-period demand cannot be sustained without positive evidence of fraud, suppression or intent to evade tax.

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