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2015 (10) TMI 1857
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....are aggrieved by the impugned orders hence both challenge the findings of the first appellate authority, which are against them. 2. The relevant facts that arise for consideration are the appellant assessee herein is a Co-operative Society formed in Chiplun, Ratnagiri. The said Society is of members and is engaged in accepting deposits, lending and operation of the accounts. After an investigation, it was noticed that the appellant had not discharged the service tax liability on the various fees collected by them from the members in respect of the functioning of the Society. Accordingly a show cause notice was issued demanding differential tax liability with interest and also proposing for imposition of penalties. Appellant assessee cont....
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....its members. Explaining the activity of the appellant assessee, he submits that appellant assessee accepts deposits from its own members and distributes the said amount as a loan to its own members and is not extending loan to outsiders and not functioning as a financial institution engaged in financial activities towards general public. He would submit that they being a Co-operative Society run by members, question of service tax does not arise on any charges collected from their members. He would draw our attention to the case law as decided by the Honourable High Court of Gujarat in the case of Green Environment Services Co-op. Soc. Ltd. as reported at 2015 (37) STR 961 (Guj.) wherein on similar situation, tax liability was struck down b....
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....e accepting deposits from their members and interest is paid on the said deposits; members are given loan to tide over their financial difficulty; charged interest from the members. In order to process such loan applications, appellant assessee charges amounts as incurred for stationary, other expenses. These amounts, according to revenue, are collected by the appellant, according to revenue in the course of rendering the services under the category of banking and other financial services. 6.3 From the factual matrix as reproduced hereinabove, it transpires that the appellant assessee is functioning as a co-operative Society for their members and welfare of their members only. They do not extend any loan or accept any deposits from publi....
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....viding effluent treatment facility commonly to its members who were the industrial establishments located at Vatva. Any service provided by them, therefore, could not be made taxable since it was merely a service provided by the members to themselves. There was no element of any commercial service provided by the service provider to its consumers. Inter alia on such basis the petitioners challenged the constitutionality of Section 65(25a), which authorizes collection of such Service Tax from the agencies such as the petitioner No.1. Pending this petition, the adjudicating authority confirmed the duty demand with penalty and interest as mentioned above. The petitioners have, therefore, separately challenged such order-in-original. 3....
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....e to the members. As such, it cannot be said that M/s. GES is rendering any service to its members. 2. Clubs or associations are essentially for recreational or social purposes. This can be inferred from the clauses (i), (ii), (iii) & (iv) of Section 65(25a) of the Finance Act, 1994. 38. I do not find any merit in either of these submissions. The very existence of the service club or association service in the Finance Act, 1994 implies that a distinction is made between a club or association and its members. For legal purposes they are two separate entities. As far as their submission that clubs or associations as defined under the Finance Act, 1994 cover only recreational or social associations, 1 find no such restriction....
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....ssioner of Income-Tax v. Ranchi Club Ltd., 1992(I) PIJR 252 (Pat) (FB), which is referred to by the Division Bench. The learned advocate for the Department also submitted that there is no question of mutuality because the club is a legal entity as it is incorporated under the Companies Act. This Court is unable to accept the submissions made by learned advocate for the Department because they were the very facts before the Division Bench for consideration and learned advocate for the Department could not set out any convincing grounds on which this Court should not follow the decision of the Division Bench of Jharkhand High Court. In the result, these petitions are allowed and it is hereby declared that Section 65(25a), Se....