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TMI Blog2006 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... premises to members for celebration of some events. 2.The ld. Counsel for the appellants inter alia contended that the taxable service in relation to the Mandap Keepers under Section 65(4)(i) of the Finance Act, 1994 defines " as any service provided to a client by Mandap Keepers in relation to the use of Mandap in any manner including the facilities provided to the client in relation to such use and also the services, if any, rendered as a caterer." His contention is that the relationship between the members and the trust is not one of a client and professional. Letting of the premises to its members was not his normal line of work. Since the many activities of the trust are to maintain the salt water swimming bath for promotion of swim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of professional and client as in the said Service Tax Act. His further submission is that the principle of mutuality has been recognized and supported by the Hon'ble Supreme Court and High Court as per the following decisions :- 1.Chelmsford Club v. CIT-2000 (243) ITR 89 (S.C.) [P. 41-48] 2. CIT v. Bankipur Club Ltd.-1997 (226) ITR 97 (S.C.) [P. 49-58] 3.CIT v. National Sports Club of India - 1998 (230) ITR 777 (Del) [P. 59-60] 4.CIT v. Delhi Gymkhana Club Ltd. - 1985 (155) ITR 373 (Del) [P.61-63] 5.CIT v. Merchant Navy Club - 1974 (96) ITR 261 (AP) [ P.64-71] Even though all the decisions cited above are in the context of Income-tax Act 1961, the principle laid down therein, i.e. a club/trust/association, cannot trade with its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Club Limited v. ACST - 2006 (3) S.T.R. 305 (Cal) = 2005 (180) E.L.T. 437 (Cal) wherein it has been held that Club is not liable to service tax as a "Mandap Keeper". He also made reference to the Finance Bill 2005 presented on 28-2-05 which proposed to insert Section 65(25)(a) as under :- "Club or association" means any person providing services, facilities or advantages, for a subscription or any other amount, to its members, but does not include - (i) any body established or constituted by or under any law for the time being in force; or (ii) any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry; or (iii) any person or body of persons engaged in any ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the exercisable liquor. The supply of liquor to a member at a fixed price by the club cannot be regarded to be a sale. For the levy of sales-tax, there must be a sale or refreshments, beverages and other preparations by the club to its members. If there is no transfer of property involved in the supply or distribution of goods by a club it would not fall within. Explanation I contained in the definition of sale in Section 2(n) nor can the club be regarded as a dealer within Section 2(g) read with Explanation I and cannot be taxed. 11.The supply of refreshment to its members did not constitute sale within the meaning of Section 2(n) of the Act, therefore, not liable to tax. 12.Drawing analogy from the cases referred to above, it could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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