TaxTMI 
TaxTMI 
2022 (5) TMI 482
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....unt @ 1.25% of the annual turnover of milk unions to manage their finances and other services and this amount is called by the appellant as Rajasthan Cooperative Dairy Federation Cess (RCDF Cess). 2. The appellant's records were audited and an audit report No. 862/2014 dated 23.03.2015 was issued to it stating that it had started paying service tax on RCDF cess from July 2012 but had not paid service tax before and that it was liable to pay service tax on the RCDF cess before June 2012 under the category of 'business support services' under Section 65(104c) of the Finance Act, 1994. At this stage, it would be pertinent to mention that Chapter V of the Finance Act, 1994 under which service tax is levied, had undergone a substantial change with effect from July 2012. Prior to this date, service tax could be levied only on specific taxable services indicated in the Act. From July 2012, service tax became payable on all the services except those which have been mentioned in the negative list. The appellant had paid service tax from July 2012 but had not paid service tax on the RCDF cess for the period prior to this date. 3. A show cause notice dated 20.04.2015 was issued to the a....
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....a as it is a government organized body and hence penalties under Section 77 and 78 cannot be levied. (vi) If service tax is held to be liable, the receipts by the appellant must be taken as cum-tax values. (vii) Service Tax on the disputed taxable value was already deposited by the appellant prior to the issue of the show cause notice and, therefore, no show cause notice should have been issued as per Section 73(3) of Chapter V of the Finance Act. 5. Learned Counsel for the appellant submits that an identical case came up before the Bangalore Bench of the Tribunal in which service tax was held to be not liable to be paid by the Karnataka Co-operative Milk Producers Federation Limited Vs. CCE, Bangalore-II [2022-VIL-184-CESTAT-BLR-ST ] relying on the judgment of a Constitution Bench of the Supreme Court in Calcutta Club Ltd. 6. Learned Departmental Representative made the following submissions: (i) He reiterated the discussions and findings given in the impugned order; (ii) Section 65 (104c) of the Finance Act as it existed during the relevant period reads as follows: "services provided in relation to business or commerce and includ....
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....ncial services analysis MIS support etc., to the milk unions who are engaged in the business of procuring milk and selling milk and milk products. The appellant's service is a support service to such business and, therefore, it is squarely covered by the definition of 'business support services' as per Section 65 (104c). Therefore, service tax needs to be paid. (vi) The submissions of the appellant that it falls under the head of club or association service is not correct as the appellant is not acting as a club but is providing business support service to its members in return for a consideration. Therefore, the judgment of the Supreme Court in Calcutta Club Ltd. and other judgments do not come to the aid of the appellant. (vii) The benefit of cum tax computation cannot be given in the facts of this case; (viii) So far as the suppression of facts which enabled invoking extended period of limitation and imposition of penalty is concerned, it is quite clear that the appellant had written a letter dated 21.6.2013 seeking an exemption from payment of service tax. However, it never sought any clarification regarding applicability or otherwise of service tax o....
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....ngal Sales Tax Act is a stand-alone provision and not an explanation in the classical sense. We, therefore, answer the three questions posed by the Division Bench in State of West Bengal v. Calcutta Club Limited (supra) as follows : (1) The doctrine of mutuality continues to be applicable to incorporated and unincorporated members' clubs after the 46th Amendment adding Article 366(29A) to the Constitution of India. (2) Young Men's Indian Association (supra) and other judgments which applied this doctrine continue to hold the field even after the 46th Amendment. (3) Sub-clause (f) of Article 366(29A) has no application to members' clubs. 50. Having gone through the judgment and order of the West Bengal Taxation Tribunal dated 3rd July, 2006 and the impugned Calcutta High Court judgment dated 1st February, 2008, and in view of the answers to the three questions referred to the present Three Judge Bench (as listed hereinabove), we are of the view that no interference is called for in the findings of fact or declaration of law in this case. Accordingly, C.A. No. 4184 of 2009 stands dismissed. C.A. No. 7497 of 2012 and other connected matters....
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.... "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 assembly, etc.)". Thus the word in its wider significance would include both, the idea of creating or establishing, and the idea of giving a legal form to, a partnership. The Bench of the Calcutta High Court in the case of R.C. Mitter and Sons v. CIT [(1955) 28 ITR 698, 704, 705] under examination now, was not, therefore, right in restricting the word "constitute" to mean only "to create", when clearly it could also mean putting a thing in a legal shape. The Bombay High Court, therefore, in the case of Dwarkadas Khetan and Co. v. CIT [(1956) 29 ITR 903, 907], was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to....
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.... that the expression "body of persons" will not include an incorporated company, nor will it include any other form of incorporation including an incorporated cooperative society. 80. It will be noticed that "club or association" was earlier defined under Sections 65(25a) and 65(25aa) to mean "any person" or "body of persons" providing service. In these definitions, the expression "body of persons" cannot possibly include persons who are incorporated entities, as such entities have been expressly excluded under Sections 65(25a)(i) and 65(25aa)(i) as "anybody established or constituted by or under any law for the time being in force". "Body of persons", therefore, would not, within these definitions, include a body constituted under any law for the time being in force. 85. The appeals of the Revenue are, therefore dismissed. Writ Petition (Civil) No. 321 of 2017 is allowed in terms of prayer (i) therein. Consequently, show cause notices, demand notices and other action taken to levy and collect Service Tax from incorporated members' clubs are declared to be void and of no effect in law." 10. We further find that following Calcutta Club Ltd. the Bangalore Bench o....