Providing Buses with Drivers is not rent a cab

In a well-reasoned decision, the Tribunal clarified the distinction between “renting” and “transport service” under service tax law. It held that where effective control and possession of vehicles remain with the service provider, the activity cannot be classified as Rent-a-Cab service. 

The Tribunal further ruled that even if ambiguity existed, extended limitation cannot be invoked where judicial precedents created bona fide belief. By setting aside both tax demand and penalties, the ruling reinforces that classification disputes rooted in interpretational divergence cannot be penalized retrospectively. The decision provides critical clarity for legacy service tax disputes involving vehicle hiring arrangements.