Members' club outside service tax net under the Finance Act; refund ordered with statutory interest.

A members' club was held not to fall within the meaning of "club or association" under Chapter V of the Finance Act, 1994 as amended by the Finance Act, 2005, so service tax could not be levied on it. The Calcutta HC applied an earlier decision involving a similarly situated club and treated the petitioners as standing on the same footing. As a result, the tax demand failed and the authorities were directed to refund the amount realised with statutory interest.

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Issues: Whether a members' club falls within the meaning of "club or association" under Chapter V of the Finance Act, 1994 as amended by the Finance Act, 2005 and is liable to service tax.

Analysis: The petitioners sought a declaration that the first petitioner, being a members' club, was outside the statutory definition and therefore not chargeable to service tax. The Court noted that the same question had already been answered in the negative in an earlier decision involving a similarly situated members' club, and that the petitioners stood on the same footing. On that basis, the Court applied the earlier ruling to the present case.

Conclusion: The first petitioner was held not to fall within the meaning of "club or association" under Chapter V of the Finance Act, 1994 as amended by the Finance Act, 2005, and the tax liability claim failed. The authorities were directed to refund the amount realised with statutory interest.

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