2011 (1) TMI 16 - SC - Service Tax

Right to appeal - aggrieved party - supply of contractual agreements - department asked the UPSRTC to supply list of contractual agreements entered into between the private parties who have offered their buses on rent basis to the appellant - Held that - Since payment of such tax is demanded from the private bus operators, if anybody is really aggrieved, it is the private bus operators. In our considered opinion, if any challenge is to be made to such notice issued by the respondents, the same has to be done by the aggrieved party like the private bus operators. It is only they who can challenge the issuance of the aforesaid notices by taking recourse to the appropriate remedy as provided under the Finance Act, 1994.

Summary

Issues:
Challenge to communication requesting list of contractual assignments, imposition of service tax on buses hired, applicability of Section 65 of the Finance Act, locus standi of the appellant to challenge the imposition of service tax.

Analysis:
The appellant filed a writ petition challenging a communication from the respondents requesting a list of contractual assignments for buses hired by the appellant. The appellant argued that no service tax should be imposed on the hired buses as it was not imposed on buses owned by the appellant. The High Court dismissed the petition, stating the appellant lacked locus standi to challenge the collection of service tax from private bus operators. The Supreme Court noted that no notice demanding service tax was issued to the appellant, and the liability under Section 65 of the Finance Act rested with the private bus operators. The Court upheld the High Court's decision, emphasizing that only the aggrieved private bus operators could challenge the tax demand and take recourse to statutory remedies under the Finance Act.

The Court held that since the tax was demanded from private bus operators, they were the ones with standing to challenge the notices and seek appropriate remedies. The appellant, not being directly affected by the tax demand, lacked the necessary standing to challenge the imposition of service tax. The Court emphasized that any challenges to such notices must be made by the aggrieved parties, the private bus operators, who could raise all relevant issues available to them under the law. Therefore, the Court concluded that the appeal lacked merit, and the appellant did not have the standing to challenge the imposition of service tax on the hired buses. The appeal was disposed of with these observations.