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2020 (1) TMI 1216
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....hat the appellant had shown value of service receipt of Rs. 31,50,000/- only in their ST -3 return for the financial year 2010-2011. It was also noticed by the Department‟s audit party from the trial balance statement for the financial year 2011-2012 that the appellant had received Rs. 70,05,000/- towards entry fee, annual membership fee and contribution from the members but, the appellants did not file any ST Return for the period and it did not discharge service tax liability on receipt of service charges. 2. It was on the basis of preliminary findings of the Department that two show cause notices dated 18 April 2013 and 16 May 2014 were issued demanding Service Tax amounting to Rs. 12,80,731/- from the appellant. 3. The above mentioned Show cause notices were adjudicated by the Adjudicating Authority vide Order-in-Original dated 16 October, 2015, wherein the Adjudicating Authority confirmed the Service Tax demand. However, an amount of Rs. 7,25,252/- from the show cause notice dated 18 April, 2013 covering the period 2010-2011 to 2011-2012 was dropped. Similarly, an amount of Rs. 3,70,800/- was also dropped from Show cause notice dated 16 May, 2014 covering the perio....
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....dded that the appellant association is non- profit organisation and thus as per the CESTAT decision in the case of Federation of India Chambers of Commerce and Industry vs. Commissioner reported in 2015 (38) STR 529 (Tri-Del)], the appellant is covered under exclusion clause in the definition of club or association under section 65(25a) of the Finance Act, 1994. It was further stressed that learned Commissioner (Appeals) has gravely erred in demanding service tax on the funding which have been received only to meet deficit which have been there in the finances of the Association and against which neither any service has been provided nor has promised in future. It has further been submitted that since the appellants and its members are not separate persons on the basis of principle of mutuality, and, therefore, there cannot be any provisions of services by the appellant to its members in the period prior to 01 July, 2012. 7. In this regard, the learned advocate has placed reliance on following decisions: 1. State of West Bengal vs. Calcutta Club Ltd. [2019-TIOL-449-SC-ST-LB]; 2. Commissioner vs Ranchi Club Ltd. [2019-TIOL-449-SC-ST-LB]; 3. Sports Club ....
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....llant did not suppress any facts. Thus, the invocation of extended period in the impugned order is not sustainable merely on the basis of non-payment of tax or non-filing of returns. In any case, the present matter involves interpretation of law in light of the given facts and circumstances. Also, all transactions were duly recorded in the books of accounts of the appellant. Thus, invocation of extended period of limitation in the impugned order is not sustainable. 10. We have also heard Shri R K Maji, learned Authorised Representative of the Department who supported the findings as given in Order-in-Appeal. 11. We have heard both the sides and perused the record of the appeal. 12. In this regard, we find that the matter is no longer res integra as section 65(105)(zzze) of the Finance Act, has already been held ultra vires by the Gujarat High Court in Sports Club of Gujarat Ltd. (supra).The relevant extract of the judgement is as under: 7. Learned Advocate Mr. Ravani appearing for the Authorities i.e. Union of India, Commissioner of Central Excise, and Deputy Commissioner/Assistant Commissioner, Service Tax Cell, vehemently opposed the petitions and submitted that....
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....n particular paragraphs 10, 14 and 32 thereof) and CIT, Kanpur and Anr. v. Canara Bank (2018) 9 SCC 322 (in particular paragraphs 12 and 17 therein), to the effect that a company incorporated under the Companies Act cannot be said to be "established" by that Act. What is missed, however, is the fact that a Company incorporated under the Companies Act or 70 a cooperative society registered as a cooperative society under a State Act can certainly be said to be "constituted" under any law for the time being in force. In R.C. Mitter & Sons, Calcutta v. CIT, West Bengal, Calcutta (1959) Supp. 2 SCR 641, this Court had occasion to construe what is meant by "constituted" under an instrument of partnership, which words occurred in Section 26A of the Income Tax Act, 1922. The Court held: "The word "constituted" does not necessarily mean "created" or "set up", though it may mean that also. It also includes the idea of clothing the agreement in a legal form. In the Oxford English Dictionary, Vol. II, at pp. 875 & 876, the word "constitute" is said to mean, inter alia, "to set up, establish, found (an institution, etc.)" and also "to give legal or official form or shape to (an assembl....
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....nt so far as sales tax is concerned applies on all fours to service tax; as, if the doctrine of agency, trust and mutuality is to be applied qua 72 members‟ clubs, there has to be an activity carried out by one person for another for consideration. We have seen how in the judgment relating to sales tax, the fact is that in members‟ clubs there is no sale by one person to another for consideration, as one cannot sell something to oneself. This would apply on all fours when we are to construe the definition of "service" under Section 65B(44) as well. 77. However, Explanation 3 has now been incorporated, under sub-clause (a) of which unincorporated associations or body of persons and their members are statutorily to be treated as distinct persons. 78. The explanation to Section 65, which was inserted by the Finance Act of 2006, reads as follows: "Explanation: For the purposes of this section, taxable service includes any taxable service provided or to be provided by any unincorporated association or body of persons to a member thereof, for cash, deferred payment or any other valuable consideration:" 79. It will be noticed that the afores....