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TMI Blog2020 (3) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... a) of the Finance Act, 1994. It has also been alleged that the petitioner, being an incorporated company, the services rendered by it cannot be said to be excluded from the definition of "club or association" in view of specific exclusion subclause (iii) to the above definition. Hence, the impugned Show Cause Notice came to be issued calling upon the petitioner to pay a sum of Rs. 3,08,58,591/- as service tax, Rs. 6,00,659/- as primary education cess and Rs. 2,24,896/- as secondary higher education cess, for the period from 2005 and May 2010, recoverable under Section 73-A (1) of the Finance Act, 1994, along with interest under Section 75 of the said Act and penalty under Sections 76, 77 and 78 of the siad Act. 3. The learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court has observed as under:- " 71. With this background, it is important now to examine the Finance Act as it obtained, firstly from 16th June, 2005 uptil 1st July, 2012. 72. The definition of "club or association" contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is that anybody "established or constituted" by or under any law for the time being in force, is not included. Shri Dhruv Agarwal laid great emphasis on the judgments in DALCO Engineering Private Limited v. Satish Prabhakar Padhye and Ors. Etc. (2010) 4 SCC 378 (in particular paragraphs 10, 14 and 32 thereof) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e" to mean only "to create", when clearly it could also mean putting a thing in a legal shape. The Bombay High Court, therefore, in the case of Dwarkadas Khetan and Co. v. CIT [(1956) 29 ITR 903, 907] , was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to apply to a firm which may have come into existence earlier by an oral agreement, but the terms and conditions of the partnership have subsequently been reduced to the form of a document. If we construe the word "constitute" in the larger sense, as indicated above, the difficulty in which the learned Chief Just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therwise as a group of persons who come together with some common object in mind. Whichever way it is looked at, what is important is that the expression "body of persons" cannot possibly include within it bodies corporate. 84. We are therefore of the view that the Jharkhand High Court and the Gujarat High Court are correct in their view of the law in following Young Men's Indian Association (supra). We are also of the view that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members' clubs in the incorporated form." 8. In the light of the above proposition by the Supreme Court, it is evident that the proposed demand in the impugned show cause notice can no longer be sustained. Therefore, this Writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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