2024 (1) TMI 1162 - AT - Service Tax

Club or association service - appellant is a Member society of the Members, who are the owners of various commercial units in a commercial complex - appellant collect amounts from its members, which is used for maintenance of the commercial complex - HELD THAT - The issue involved in the present case is prima facie covered by the cited judgment of Apex Court in the case of State of West Bengal 2019 (10) TMI 160 - SUPREME COURT . However, at the time of passing of adjudicating order the said judgment was not available being passed subsequently. It is also observed that the judgment is based on certain facts such as the status of the association and the fact and the nature of the charges collected by the association from the members. In this position entire matter needs to be reconsidered in the light of the Hon'ble Supreme Court judgment in the West Bengal case vis-a-vis facts in the present case whether the same are similar to the fact of the said Apex Court Judgment. Accordingly, the adjudicating authority should reconsider the matter in the light of the facts of the present case as well as applicability of the various judgments including the judgment of Apex Court cited by the appellant. The appeals are allowed by way of remanded to the adjudicating authority.

Summary

Issues involved:
The issue involved in this case is whether the appellant, a Member society collecting amounts from its members for maintenance of a commercial complex, is liable to pay Service Tax under the definition of club or association service as provided in sub clause (zzze) of clause 105 of Section 65 of the Finance Act.

Summary:

The appellant, represented by Shri Amit Laddha, Advocate, contended that previous Tribunal orders on identical issues set aside the demand of service tax under club or association service. The appellant relied on judgments including Sumel Business Park 3 Co Operative Service Society Ltd, State of West Bengal, Rajasthan Co-Operative Dairy Federation Ltd, Mahindra Holidays and Resorts India Ltd, and The Sumel Business Part-2 Co-operative Service Society Order.

Shri Satyapal Singh Vikal, Assistant Commissioner (AR) for the revenue, reiterated the findings of the impugned order.

After considering the submissions, the Tribunal noted that the issue was prima facie covered by the Apex Court judgment in the State of West Bengal case. However, since the judgment was passed subsequently to the adjudicating order, the Tribunal decided to remand the matter for reconsideration. The Tribunal directed the adjudicating authority to reexamine the case in light of the facts and applicable judgments, including the Apex Court judgment cited by the appellant. The impugned order was set aside, and the appeals were allowed by way of remand to the adjudicating authority for passing a fresh order within two months, ensuring compliance with the principles of natural justice.

The appeals were allowed by way of remand to the adjudicating authority and the order was pronounced in open Court on 25.01.2024.