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TMI Blog2006 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that the taxable service in relation to the Mandap Keepers under Section 65(4)(i) of the Finance Act, 1994 defines " as any service provided to a client by Mandap Keepers in relation to the use of Mandap in any manner including the facilities provided to the client in relation to such use and also the services, if any, rendered as a caterer." His contention is that the relationship between the members and the trust is not one of a client and professional. Letting of the premises to its members was not his normal line of work. Since the many activities of the trust are to maintain the salt water swimming bath for promotion of swimming activities and for both reason the appellant cannot be termed as Mandap Keeper. Members of the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mutuality has been recognized and supported by the Hon'ble Supreme Court and High Court as per the following decisions :- 1.Chelmsford Club v. CIT-2000 (243) ITR 89 (S.C.) [P. 41-48] 2. CIT v. Bankipur Club Ltd.-1997 (226) ITR 97 (S.C.) [P. 49-58] 3.CIT v. National Sports Club of India - 1998 (230) ITR 777 (Del) [P. 59-60] 4.CIT v. Delhi Gymkhana Club Ltd. - 1985 (155) ITR 373 (Del) [P.61-63] 5.CIT v. Merchant Navy Club - 1974 (96) ITR 261 (AP) [ P.64-71] Even though all the decisions cited above are in the context of Income-tax Act 1961, the principle laid down therein, i.e. a club/trust/association, cannot trade with its members since they are the same in universal application. It recognizes the concept of mutuality in the context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not liable to service tax as a "Mandap Keeper". He also made reference to the Finance Bill 2005 presented on 28-2-05 which proposed to insert Section 65(25)(a) as under :- "Club or association" means any person providing services, facilities or advantages, for a subscription or any other amount, to its members, but does not include - (i) any body established or constituted by or under any law for the time being in force; or (ii) any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry; or (iii) any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. For the levy of sales-tax, there must be a sale or refreshments, beverages and other preparations by the club to its members. If there is no transfer of property involved in the supply or distribution of goods by a club it would not fall within. Explanation I contained in the definition of sale in Section 2(n) nor can the club be regarded as a dealer within Section 2(g) read with Explanation I and cannot be taxed. 11.The supply of refreshment to its members did not constitute sale within the meaning of Section 2(n) of the Act, therefore, not liable to tax. 12.Drawing analogy from the cases referred to above, it could safely be said that the appellant is not liable to pay service tax on the activities in question. I, therefore, set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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