TMI Blog2017 (9) TMI 1679X X X X Extracts X X X X X X X X Extracts X X X X ..... saction is not considered as a sale by the club to its member as on the anvil of mutuality, a member and the club being the same, a member cannot be said to selling anything to itself for the transaction to qualify as a sale - the first petitioner being a members club, it is not liable to pay the service tax under the Finance Act, 1994 as amended by the Finance Act, 2005. The issue as to whether a members club is liable to pay service tax under Sections 65, 66 and 67 of the Finance Act, was considered by the Jharkhand High Court. In Ranchi Club Limited [2012 (6) TMI 636 - JHARKHAND HIGH COURT] it has held that, a members club is not liable to pay the same - there is no reason as to why a view contrary to that of Ranchi Club Ltd. is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason of the concept of mutuality, the question of passing on consideration between the member and its club does not arise. Since one of the essential ingredients to attack service tax being consideration specified in Section 67 being absent in a transaction between a member and its club, the provisions of Section 67 or for that matter Section 66 of the Act are not attracted. He contends that, a member of a members club reimburses the expenses to the club which such club has expended on account of a member. The realization of such expenses by the club from the member cannot be construed to be a consideration. He draws the attention of the Court to the definitions of club or association as appearing in Section 65[25(a)] and taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. I have heard the rival contentions of the parties and the materials made available on record. The first petitioner is admittedly a members club. The concept of mutuality applies with regard to transactions between a member and the members club. A members club is considered as a one legal entity of the member involved irrespective of the member of members or the legal entity that the members seek to clothe the club with, in so far transactions between the club and its members are concerned. When food or drinks are consumed by a member, this transaction is not considered as a sale by the club to its member as on the anvil of mutuality, a member and the club being the same, a member cannot be said to selling anything to itself for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in the present writ petition, the first petitioner has obtained a registration and has been depositing service tax with the authorities. The interim order dated April 13, 2006 provides that, in the event of the petitioners succeeding, the respondents will be under obligation to refund the amount deposited and with the interest that may be fixed by the Court. The petitioners having succeeded in the present writ petition, it would be appropriate to direct the respondents to refund the amount along with the statutory interest of 6% from the relevant dates of deposits till the date of refund. It is expected that, the authorities processes the refund as expeditiously as possible and that, the same is made over to the petitioners within a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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