Mutuality principle excludes housing society maintenance contributions from service tax, with refund of tax paid.

Maintenance and common expense contributions collected by a co-operative housing society from its members were held not to constitute taxable club or association services, because the levy requires a service relationship between distinct persons and the society's receipts were for common upkeep under its bye-laws. Applying mutuality, the contributions did not satisfy the definition of "service" under Section 65B(44) of the Finance Act, 1994, and the explanation to that provision did not change the result on these facts. Following the society's earlier identical case, the tax paid was held refundable and consequential relief was granted.

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Issues: Whether the maintenance and common expense contributions collected by a co-operative housing society from its members were liable to service tax under club or association services, and whether the tax already paid was refundable.

Analysis: The contribution collected from members was shown to be for common maintenance and upkeep under the society's bye-laws, and not for a service rendered to an outside recipient. A registered co-operative society is a body corporate under the Maharashtra Co-operative Societies Act, 1960, but the decisive question was whether the society and its members could be treated as separate persons for levy under the service tax law. Applying the principle of mutuality and the statutory requirement of a service involving a service provider and service recipient, the contribution did not answer the definition of service under Section 65B(44) of the Finance Act, 1994. The explanation to Section 65B did not alter this conclusion on the facts, and the earlier decision in the appellant's own case for an identical issue was followed.

Conclusion: The contributions were not exigible to service tax under club or association services, and the amount paid was refundable. The appeal was allowed with consequential relief.

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