2011 (8) TMI 409 - AT - Service Tax

Service tax liability - Change in the name of the company - Whether service tax demand against M/s Fast Track Travels can be recovered from M/s MAtoshree Tours & Travels - During the period in question M/s Fast Track Travels was the service provider to M/s SICCL - Letter dt. 7.7.2004 written by Shri R.D.Bodke clearly states about the change in name as well as taking over the business of old firm - Letter also makes a request for making payment in the name of the new company - . He clearly stated that the name of the firm is changed. The ledger account of the service recipient also showed change of firm s name w.e.f 02.08.2004. It is on record that M/s Fast Track Travels or any of its partner had not raised any objection against letter dt. 7.7.2004 to the department - Therefore, agree with the finding of the Commissioner (Appeals) that M/s Matoshree Tours & Travels is liable to pay service tax on the service rent-a-cab provided to M/s SICCL during the relevant period.

Summary

Issues:
1. Recovery of tax liability from a different entity.
2. Dispute over taxability of services provided.
3. Interpretation of correspondence indicating change in business name.

Analysis:
1. The appeal involved a dispute regarding the recovery of tax liability from M/s Matoshree Tours & Travels for services provided by M/s Fast Track Travels to M/s Sahara India Commercial Corporation Ltd. The appellant argued that the two entities were distinct, citing partnership deed and registration certificate as evidence. The department contended that a letter from the proprietor of Fast Track Travels clearly indicated a change in business name to Matoshree Tours & Travels, thereby establishing a connection between the two entities.

2. The Tribunal noted that there was no dispute regarding the taxability of the services provided by Fast Track Travels. The appellant had not challenged this aspect before the authorities. The key issue was whether the tax liability could be imposed on Matoshree Tours & Travels for the services rendered by Fast Track Travels. The Tribunal found that the letter dated 7.7.2004, where the proprietor expressed the intention to dissolve Fast Track Travels and operate under the name Matoshree Tours & Travels, along with a request for payments to be made in the new name, indicated a clear transfer of business.

3. Upon reviewing the case records and submissions, the Tribunal observed that the correspondence provided sufficient evidence of the change in business name and the continuation of services under the new entity. The ledger accounts also reflected the change in the firm's name. As Fast Track Travels did not object to the letter indicating the name change, the Tribunal agreed with the Commissioner (Appeals) that Matoshree Tours & Travels was liable to pay service tax for the rent-a-cab services provided during the relevant period. Consequently, the appeal was dismissed, affirming the decision to recover the tax liability from Matoshree Tours & Travels.

This detailed analysis outlines the key legal issues, arguments presented by both parties, and the Tribunal's reasoning leading to the dismissal of the appeal and upholding the tax liability against Matoshree Tours & Travels.