Union of India & Ors. Vs Coastal Container Transporters Association & Ors. (Supreme Court of India)
The Supreme Court allowed the Union of India’s appeal and set aside the Gujarat High Court’s judgment, holding that the High Court ought not to have entertained a writ petition challenging show cause notices issued under Section 73(1) of the Finance Act, 1994 at the notice stage. The respondents, comprising an association of transport operators and two transport companies, had approached the High Court after show cause notices proposed to classify their services as “cargo handling service” instead of “goods transport agency” for the purpose of service tax. The High Court had quashed the notices, holding that the respondents’ activities fell within the category of goods transport agency and that the notices were contrary to CBEC circulars.
The respondents contended that they merely provided transportation of goods by road, while services at ports and transportation by sea were performed by shipping lines. According to them, shipping lines raised invoices in their names, and they recovered the corresponding charges from customers through debit notes without adding any margin. They relied upon CBEC circulars dated 06.08.2008 and 05.10.2015, asserting that their activities were classifiable as goods transport agency services and not cargo handling services.
