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2017 (9) TMI 1679 - HC - Service TaxMember's club - club or association or not? - Chapter-V of the Finance Act, 1994 as amended by the Finance Act, 2005 - Held that:- 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 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 required to be taken in the facts of the present case. The authorities will not proceed with the show cause notice which is a subject matter of the interim application - petition allowed.
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