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TMI Blog2011 (4) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... to be brought under the tax net for payment of service tax in respect of such spare bus. 2. The facts which are necessary for the disposal of writ petitions are that the petitioners are stage carriage operators having been issued permits by the Regional Transport Authority, Pollachi. All the petitioners have a spare bus permit to be operated in the place of the route bus in case of break down or for special occasion. The respondent issued a notice directing the petitioner to register themselves under the provision of the Finance Act, 1994, for payment of service tax on the ground that they are tour operators coming under the definition of Section 65 (78) of Finance Act, 1994, (Act 32 of 94). It appears that the petitioners and other such noticees challenged the action of the Department by filing writ petitions before this Court. The writ petitions were heard by a Hon'ble Division Bench of this Court and such of those writ petitions filed by stage carriage operators and rent-a-car-scheme operators were dismissed by the Hon'ble Division Bench by its Judgment in The Secretary Federation of Bus Operators Association of Tamil Nadu vs. Union of India, 2001, 2 MLJ 590 . The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply, the petitioners specifically sought for an opportunity of personal hearing. The respondent after referring to the reply given by the petitioners without affording a personal hearing, by separate and identical orders all dated 27.09.2001, rejected the contention raised by the petitioners and directed them to register and pay Service Tax. Challenging the said orders, the petitioners are before this Court by way of these writ petitions. 5. Mr. M.Krishanappan, learned Senior counsel appearing for the petitioners, submit that the impugned orders are in violation of the principles of the natural justice as the respondent did not afford an opportunity of personal hearing inspite of the same being specifically sought for by the petitioners in their reply to the show cause notices. The learned Senior counsel would further submit that the impugned order is based on surmises and conjectures. Further that the spare bus owned by the petitioners is also a stage carriage and different from the Tourist vehicle, the spare bus has a seating capacity of 57+2 with seating arrangement on the right hand side 3X11 =33 seats, rear side 6X1 = 6 seats, left side facing forward 2X9 = 18 seats and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the impugned orders is being tested based on the old Section 65 of the Finance Act as its stood prior to its amendment in 1998 and 2004. 10. As noticed above, the Hon'ble Division Bench of this Court in the case of The Secretary Federation of Bus operators Association of Tamil Nadu, (supra) considered the validity of the notices issued to tour operators with a request to register themselves and follow the provisions of the Finance Act, 1994, and the rules framed thereunder with effect from 01.04.2000. The petitioners before the Hon'ble Division Bench which include the petitioners herein were stage carriage operators owning spare buses covered under spare bus permits issued as per Section 72 (2) (xvii) of the Motor Vehicles Act, 1998, contract carriage operators, owning vehicles covered under Section 74 of the Motor Vehicles Act, 1988, and owners of maxi cabs or taxies having permits under Section 74 of the Motor Vehicles Act, 1998. Before the Hon'ble Division Bench the spare bus permit holders contended that spare buses are not tourist vehicles within the meaning Section 2(43) of the Motor Vehicles Act, and therefore, not liable to pay Service Tax. The Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection to the said effect in the Judgment of the Hon'ble Division Bench as referred supra. Infact, the respondent in the impugned order accepts that the provision of Section 65 (77) of the Finance Act is not attracted in the petitioners case, but yet, on a mere conjecture came to a conclusion that the petitioner has obtained or obtaining special Tourist permit is covered under Section 65 of the Finance Act, 1994. At this stage, it should be pointed out that the respondent, exercising power under a fiscal statue, while passing an order bringing the petitioner under the Tax net is required to render a specific finding as to how the petitioner is liable to pay the tax and the same cannot be on surmises and conjectures. The respondent cannot ignore the definition of stage carriage , tourist vehicle' as defined under the Motor Vehicles Act, since the provision of the Finance Act, 1994, refers to the meaning of the terms 'tourist vehicle' and 'tour operator' as defined under the Motor Vehicles Act, 1988. Therefore, the respondent has to necessarily examine the aspect as to whether the provision of the Finance Act, 1994, are attracted to the case of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders of spare bus permits to establish before the assessing authority that such spare buses issued with spare bus permits were infact tourist vehicles within the meaning of Section 2(43) of the Act and as to why they should not be made liable for payment of Service Tax. If such a notice was issued to the petitioners, it would be open to the petitioners to explain and substantiate their case that their spare bus covered by a spare bus permit under Section 72(2)(xvii) of the Motor Vehicles Act is not a tourist vehicle within the meaning of Section 2(43) of the Motor Vehicles Act. The Hon'ble Division Bench thought fit to grant such liberty to the holders of spare bus permit to substantiate that their reserve vehicle under the stage carriage permit was not capable of being used as a contract carriage under special permit or was not used as a contract carriage by availing a special permit. It cannot be disputed that the essential ingredients of a contract carriage, among other things, it carries passenger for hire or reward, it is engaged in contracts whether expressed or implied for use of such vehicle as a whole, the contract to be entered into by the person with the permit hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such and therefore, made liable to pay Service Tax. In view of this specific question raised in these cases, on facts the decision of the Karnataka High Court does not lend much support to the contention raised by the learned Senior Standing counsel appearing for the respondent. 16. The learned Senior standing counsel placed reliance on the Judgement of this Court, delivered by his Lordship Mr.Justice P.Sathasivam as he then was in Sri Pandyan Travels vs. Commissioner of Central Excise Chennai-II, 2004 (1) 163 ELT 409 (Madras) . The petitioner in the said writ petition was a contract carriage operator and after the dismissal of the writ petition by the Honble Division Bench in Secretary Federation of Bus Operators Association of Tamil Nadu, notice was issued to the petitioner as to whether their vehicle are tourist vehicle as contemplated under Section 2 (43) of the Act. This Court by relying on the decision of the Hon'ble Division Bench dismissed the writ petition as contract carriage vehicle are also covered under Service Tax and since petitioner therein is covered under the definition of tour operator, they are liable to register and pay Service Tax. Since the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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