Nominal fees for designated passenger halts are not consideration for a taxable service.

UPSRTC’s Ayodhya region designated certain highway dhabas under its “Yatri Plaza Yojna” as approved bus halts.

Bus conductors collected ₹25 from each dhaba by issuing a ticket, as part of a system intended to regulate bus halts and ensure passenger safety and convenience.

The Department treated the receipts as consideration for a taxable declared service under Section 66E(e) of the Finance Act, 1994.

It issued a show-cause notice for October 2014 to June 2017; the demand of ₹3,85,403, interest and penalties was confirmed by the adjudicating authority, and the Commissioner (Appeals) upheld that order.

UPSRTC appealed to the Tribunal.

Whether the ₹25 collected from dhabas under the Yatri Plaza scheme was consideration for a taxable service provided by UPSRTC, including a declared service under Section 66E(e) of the Finance Act, 1994.

Whether the extended period of limitation under the proviso to Section 73(1) was available for the demand.

Section 65B(44) of the Finance Act, 1994 defines “service” as an activity carried out by one person for another for consideration; Section 66B imposes service tax on taxable services; and Section 66E(e) identifies as a declared service agreeing to the obligation to do an act, refrain from doing an act, or tolerate an act or situation.

The Tribunal’s reasoning required an identifiable service-provider and recipient and a consideration-based relationship.

It also considered whether the arrangement involved promotion or marketing amounting to Business Auxiliary Service, or renting of property, and found that it did not.

The appellant separately relied on the limitation requirements in Section 73(1), including the conditions for invoking the extended period, but the Tribunal did not rule on that issue.

The Tribunal found no service supplied by UPSRTC to the dhaba owners, or by the dhaba owners to UPSRTC or the passengers, that could establish the required service-provider, recipient and consideration relationship.

It treated the scheme as a public-welfare and administrative measure: designated halts were intended to secure passenger amenities and regulate bus operations, while the dhabas’ obligations concerned those amenities and food standards.

The ₹25 collection and designation of approved halts did not, on the Tribunal’s view, amount to a commercial service, promotion or marketing, or renting of property.

Although limitation was raised, the Tribunal’s decision did not depend on resolving it.

It set aside the impugned appellate order and allowed UPSRTC’s appeal with consequential relief as per law.