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2022 (5) TMI 800 - HC - Service TaxJuristic person - separate identity - mutuality of services - sharing of profit - whether a Partner in the Firm can be said to be rendering services to the Partnership Firm so as to fall within the ambit of services as per the Finance Act, 1994? - HELD THAT:- For the period prior to 01.07.2012, there is no definition of a ‘person’ in the Finance Act, 1994 - the term ‘person’ was defined for the first time with effect from 1.7.2012 vide Section 65B (37) of the Finance Act. The period of dispute in all these appeals is prior to 01.07.2012 - Prior to 01.07.2012, there was no definition of the term “person” in the Finance Act, 1994. Only with effect from 01.07.2012, vide Section 65B (37) of the Finance Act, 1994, a ‘person’ was defined for the first time. This definition, inter alia, included a firm. The partnership firm, M/s Zydus Healthcare cannot be considered as a ‘person’ distinct from the Respondent – partner. Therefore, there cannot be a service provider – service recipient relationship between a partner and the partnership firm when a partner discharges his duties as a partner pursuant to deed of partnership. Hence no service tax is payable on the activities performed by the respondent in the capacity of partner to the firm - Section-65(105)(zzb) applies to service provided to a client by a person in relation to business auxiliary service. Hence, two distinct persons are required to attract this levy. Partner’s capital to a firm can be in the form of cash/asset. It can also be in the form of contribution of skill and labour alone without contribution in cash – “sweat equity”. The substantial questions of law are answered in favour of the respondents and against the revenue - appeal dismissed - decided against Revenue.
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