TMI Blog2017 (3) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Sanjay Jain, D.R. - for the respondent ORDER Per Justice Dr. Satish Chandra The present appeal is filed against the Order-in-Appeal No. 361/2013 dated 30.12.2013. 2. The brief facts of the case are that the appellant, during the period under consideration (April, 2006 to March, 2011) was providing services under club or association services to its employees. For the club activities, the department has raised the demand for service tax. Being aggrieved, the appellant has filed the present appeal. 3. With this background, we have heard Shri Kumar Vikram, ld. Advocate for the appellant and Shri Sanjay Jain, ld. Counsel for the Department. 4. After hearing both the parties and on perusal of record, it appears that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice by the club cannot be regarded to be a sale. If, however, liquor is supplied to and paid for by a person who is not a bona fide member of the club or his duly authorised agent, there would be a sale. With regard to incorporated clubs a distinction has been drawn. Where such a club has all the characteristics of a members club consistent with its incorporation, that is to say, where every member is a shareholder and every shareholder is a member, no license need to be taken out if liquor is supplied only to the members. If some of the shareholders are not members or some of the members are not shareholders, that would the case of a proprietary club and would involve sale. Proprietary clubs stand on a different footing. The members are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contributions received by the club from their members. But this principle cannot have any application in respect of the surplus received from non-members. It is not difficult to conceive of cased where one and the same concern may indulge in activities which are partly mutual and partly non-mutual. True, keeping in view the principle of mutuality, the surplus accruing to a Members Club from the subscription charges received from its members cannot be said to be Income within the meaning of the Act. But, if such receipts are from sources other than the members, then still can it be said that such receipts are not taxable in the hands of the club? The answer is obvious. No exemption can be claimed in respect of such receipts on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e activities of the members club has been already considered and decided by the Hon ble Supreme Court as well as by the Full Bench of this Court in the cases referred above, therefore, this issue is no more res integra and issue is to be answered in favour of the writ petitioner and it can be held that in view of the mutuality and in view of the activities of the club, if club proves any service to its members may be in any form including as mandap keeper, then it is not a service by one to another in the light of the decisions referred above as foundational facts of existence of two legal entities in such transaction is missing. However, so far as services by the club to other than member, learned counsel for the petitioner submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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