2026-VIL-1841-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Taxability of transportation of goods by road by a transporter who issued no consignment notes - Negative list regime - Appellant provided transportation services to companies and firms and, under a bona fide belief that the liability rested on service recipients under reverse charge, neither obtained registration nor filed returns for the relevant year - On third-party information from the Income Tax Department, SCN proposed demand on gross receipts by best judgment under Section 72, and the demand was confirmed with interest and penalties, the Adjudicating Authority holding that the services were not GTA services in the absence of consignment notes, yet confirming tax under forward charge - Appellant contended that once the services are held not to be GTA services, transportation of goods by road falls in the negative list under Section 66D(p)(i) - Whether transportation services rendered without consignment notes are leviable to service tax - HELD - Section 66D(p)(i) excluded transportation of goods by road from the levy except where undertaken by a GTA or courier agency, and mere transportation of goods by road does not attract tax. The Adjudicating Authority itself held that the services cannot be construed as GTA services by any stretch of imagination, and was required to examine the applicability of Section 66D(p)(i), which was not done. In the absence of consignment notes the services cannot be considered GTA services, as held in earlier decisions of the Tribunal - The transportation services are not leviable to service tax, and the demand on gross receipts is set aside - Demand on entire receipts reflected in Income Tax data without identification of taxable service and invocation of extended period of limitation - SCN demanded tax on the entire receipts reflected in the third-party data without specifying the taxable service, and invoked the extended period on the ground that Appellant failed to obtain registration and declare the value in returns - Appellant contended that the burden lay on the Department and that no suppression was shown - Whether the demand on gross receipts can be sustained and whether the extended period was validly invoked - HELD - The burden of establishing that the receipts represent consideration for a taxable service rests on the Department. Reflection of receipts in Income Tax records may furnish a basis for inquiry but cannot by itself establish the taxable character of the receipts or the nature of the services. Where the demand is raised mechanically on third-party data without independent investigation, there is no basis for the extended period, as the Tribunal has held earlier. The receipts were available in records accessible to the Department, no independent investigation showed deliberate concealment or intent to evade tax, and the failure to obtain registration and file returns arose from a bona fide belief supported by documents produced in adjudication - The extended period was not validly invoked, the entire demand is barred by limitation, the penalties are set aside, and the appeal is allowed.
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