TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 900
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....service' along with interest on the unpaid portion besides imposition of penalty under section 76, 77 and 78 of Finance Act, 1994. 2. It appears that the appellant is in receipt of various amounts from its members and other persons for use of sporting, recreational and infrastructural facilities of the club in addition to entrance fees and periodical subscription amounting to Rs. 4,88,76,021/- for the period from April 2005 to September 2009. There were sought to be taxed as 'club or association service' as per section 65(105) (zzze) of Finance Act, 1994. Further, the caterers contracted by the appellant for delivery of food and beverages to members were required to pay contract fee, electricity charges and a miscellaneous amount -....
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....ion that is sought to be taxed does not appear to have been examined with reference to section 65 of Finance Act, 1994. Exacerbating this misapplication are the avoidable visits to the show cause notice for comprehending the discussion in the impugned order; the impugned order has segregated the consideration received from different entities but has not quantified the tax liability under each head. Consequently, there is a demonstrated lack of clarity in the impugned order that casts doubts about its sustainability. 5. The appellant, in its wisdom and by application of common sense, registered itself under the most obvious head as provider of 'club or association service' and, claiming that it was not rendering any taxable service othe....
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....ellant. Having accepted the tax liability, having discharged the same and having claimed that the incorrect accounting code should be treated as a mere technical flaw, there is no merit in pleading before us that the bar of limitation applies. Undoubtedly, the catering contractors who are engaged to provide comestibles to the members, are enabled to do so owing to the various facilities provided by the appellant. The amount of tax that has been paid on these receipts is affirmed as being in accordance with the Finance ACt, 1994. 7. Some of the staff employed by the appellant have been subjected to recovery of amounts towards accommodation provided to them. It is on record that appellant rendered tax on the amounts collected by them during ....
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....1994 to be ultra vires to the extent that it seeks to levy service tax on the transactions between a member and the club/association of which he is a member. 9. We have heard the learned Counsel for appellant and the learned Authorized Representative. In view of the above cited decisions of the Hon'ble High Court of Gujarat, the demand of tax on receipts from members cannot sustain. We also find that the attempt in the proceedings before the lower authority has been to tax these receipts merely because appellant is a club and because of the existence of section 65 (105) (zzze) in Finance Act, 1994 which is as below: "Taxable Service" means any service provided or to be provided to its members, by any club or association in relation to....
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....or joining fee represents merely the present value of such assets and not the consideration for service that the member of may obtain from the club. The founders of the institution have, assuredly, made financial contributions to bring it into being and those who join subsequently will, in equity, be required to make their contributions too. Pooling of finances in this manner for a common purpose is but participation in aggregate of expenditure and is not an expense incurred for obtaining a service. Therefore, to the extent that the services of a club are contingent upon payments to be made separately for each transaction, contribution to the corpus of a club cannot be construed as consideration for service and, hence, is outside the scope ....