TMI Blog2020 (2) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... as well and may also be generating a surplus. However, these factors do not change the character of the appellant as that of a club or association. As decided by the STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] and several previous judgments, no service tax can be levied on a club or association on the amounts collected by them from their own members either towards subscription or towards some other services because the club is held to be not a different legal entity but the same as that of the members. As there is no distinction between the identity of the members and the identity of the club, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeared to fall under the definition of Club or Association service in terms of Section 65(25a) of the Finance Act, 1994 and taxable under section 65(105)(zzze) and also as per explanation to section 65 of the Finance Act, 1994. After investigation the appellants were served a show cause notice dt.30.05.2007 calling upon them to explain as to why: a) They should not pay ₹ 88,02,245/- towards Service Tax and ₹ 1,76,045/- towards education cess on the taxable value of ₹ 8,21,71,904/- on Club or Association services, provided by them during the period from 16.06.2005 to under the proviso to sub-section (1) of section 73 of the Finance Act, 1994; An amount of ₹ 20,95,542/- towards Service Tax and ₹ 41, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the amounts which they have, undisputedly collected from members. This point was raised before learned adjudicating authority who, however, held that the appellant does not qualify the tests to establish mutuality. His findings in Para 14.5 of the impugned order are as follows: 14.5 From the examining of the constitution of the club and its activities, it is obvious that common identity is lacking among the members; the objective of the company is basically to provide entertainment by way of service , facility and advantage to its members all over India and charge for the same; further, the non-members are treated alike in extending the facilities to reciprocal members which is beyond the scope of activities of a members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposal over the surplus, and in exercise of that right they may agree that on winding up, the surplus will be transferred to a club or association with similar activities. Most importantly, the surplus that is made does not come back to the members of the club as shareholders of a company in the form of dividends upon their shares. Since the members perform the activities of the club for themselves, the fact that they incorporate a legal entity to do it for them makes no difference. This judgment was also followed by this Court in Income Tax Officer, Mumbai v. Venkatesh Premises Cooperative Society Limited, (2018) 15 SCC 37. What is of essence, therefore, in applying this doctrine is that there is no sale transaction between two persons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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