CESTAT Sets Aside ₹3.03-Crore Service-Tax Demand Against Road Haulier: 2015-16 Transport Without Consignment Notes Was Non-Taxable

The appellant transported goods for various clients during FY 2015–16.

It maintained that its transportation services were not liable to tax at its end, relying on the reverse-charge mechanism for specified GTA services under Notification No. 30/2012-Service Tax; it did not obtain registration or file returns for that period and registered on 23 February 2017.

Acting on information received from the Income Tax Department, the Revenue treated receipts of ₹20,93,98,281 as consideration for taxable services and, using a best-judgment assessment under Section 72 of the Finance Act, 1994, calculated tax of ₹3,03,62,750.

The show-cause notice dated 21 October 2020 proposed the demand, interest and penalties, invoking the extended limitation period.

The adjudicating authority confirmed the demand and imposed penalties, reasoning in part that, without consignment notes, the services could not be treated as GTA services.

The appellant appealed.

Section 66D(p)(i) of the Finance Act, 1994, placed transportation of goods by road in the negative list, except transportation by a goods transport agency (GTA) or courier agency; under Section 65B(26), a GTA is a person providing a service in relation to road transport and issuing a consignment note.

The Tribunal treated the absence of a consignment note, and the resulting finding that the appellant was not a GTA, as bringing the road-transport service within the negative list.

The Department must establish that receipts are consideration for an identified taxable service; Income Tax data alone does not establish either the nature or taxability of receipts.

The extended period under the proviso to Section 73(1) requires evidence of the statutory grounds, such as suppression or wilful misstatement with intent to evade tax; those grounds cannot be presumed merely from non-filing or a discrepancy in data.

The Tribunal relied on Kalyani Transco v. Commissioner of CGST & C.Ex., Rourkela, Final Order No. 75740/2025, for the treatment of non-GTA road transportation under Section 66D(p)(i), and S.K. Logitech Pvt. Ltd. v. Commissioner of CGST, Dibrugarh, Final Order No. 76009/2026, on the requirements for invoking the extended period.

The adjudicating authority had found that the appellant’s services could not be construed as GTA services, but confirmed tax without examining the negative-list treatment of non-GTA road transportation.

The Tribunal held that this finding, read with the absence of consignment notes, meant the transportation services were not taxable under Section 66D(p)(i).

Separately, the demand had been calculated on the entire amount reported in Income Tax records without identifying a taxable service or independently establishing that the receipts were taxable consideration.

The Department also produced no affirmative evidence of deliberate concealment or intent to evade tax; the receipts were available in the tax administration’s records, and the appellant’s conduct was consistent with its stated understanding of the applicable regime.

The extended period was therefore unavailable, independently providing a basis to set aside the demand.

It set aside the impugned order and all penalties, allowed the appeal, and granted consequential relief, if any.