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2020 (2) TMI 1640 - HC - Service TaxLevy of service tax - members club - mutuality of interest - HELD THAT - The exact issue was before the Supreme Court in STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. 2019 (10) TMI 160 - SUPREME COURT where it was held that from 2005 onwards the Finance Act of 1994 does not purport to levy service tax on members clubs in the incorporated form. Petition dismissed.
Issues:
Whether the respondent club, being a members club, was exigible to service tax. Analysis: The High Court of Calcutta addressed the issue of whether a respondent club, classified as a members club, was liable for service tax. The court noted that a previous single judge's decision had ruled in favor of the club, stating it was not liable for service tax and granted consequential reliefs. The Commissioner of service tax appealed this decision. The High Court highlighted that the same issue had been previously considered by the Supreme Court in two cases: State of West Bengal and Others Versus Calcutta Club Limited and Chief Commissioner of Central Excise and Service and Another Versus Ranchi Club Ltd. The Supreme Court, in its judgment dated 31st October, 2019, had upheld the decision that clubs like the respondent club were not liable for service tax. The High Court, therefore, concluded that the issue was settled by the Supreme Court's judgment and affirmed the single judge's decision from 2017. The High Court dismissed the appeal (APO No.86 of 2019) brought by the Commissioner of service tax, upholding the decision that the respondent club was not liable for service tax. The court directed strict compliance with the order within four weeks of communication. Additionally, a cross-objection (OCOT No.2 of 2019) was treated and subsequently dismissed in light of the Supreme Court's precedent and the affirmed judgment of the single judge. The High Court's ruling was based on the Supreme Court's clarification on the tax liability of members clubs, providing a clear legal precedent for similar cases in the future.
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