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TMI Blog2024 (1) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found that the dispute herein is covered on all fours in favour of the Appellant - the definition in Sec 65 (25aa), w.e.f. 01.07.2012, also specifically excludes any body established or constituted by or under any law for the time being in force. The Appellant is a body registered or incorporated under the Andhra Pradesh Societies Registration Act, 2001. Further explanation 3(a) to Sec 65(44) does not apply to members Club/Association, which are incorporated. The impugned order set aside - appeal allowed. - HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) And HON BLE MR. A.K. JYOTISHI, MEMBER (TECHNICAL) Shri B. Venugopal, Advocate for the Appellant Shri V.R. Pavan Kumar, AR for the Revenue ORDER [ Order per : ANIL CHOUDHARY ] The issue in these Appeals is whether the Appellant, which is an association of house owners (in group residential houses), registered under the Andhra Pradesh Societies Registration Act, 2001, are liable to pay service tax on the amount of the contributions made by their members for their mutual benefit in the nature of maintenance charges, etc., during the period 01.04.2011 to 31.03.2016 under the category of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ADC) ST, confirming a truncated demand of Rs.16,65,507/- under proviso to Sec 73(1) of the Act read with Sec 174(2) of CGST Act, 2017 along with interest under Sec 75 of the Act read with Sec 174(2) of CGST Act and also imposing penalty of Rs.16,65,507/- under Sec 78 of the Act read with Sec 174(2) of CGST Act. 8. Against the above denovo OIO dt.08.02.2019, the Appellant preferred Appeal before the Commissioner (Appeals-I), Hyderabad, who disposed of the Appeal vide impugned OIA dt.25.11.2019 rejecting the contentions of the Appellant and confirming the adjudication levies as indicated above. 9. Hence the present Appeal No.ST/30045/2021. 10. As both the Appeals arise from common SCN with respect to the same matter, they have been taken up together for Hearing and disposal. 11. It is not under dispute that the Appellant is a Resident welfare association formed by the owners of the villas themselves, and duly registered as a society under the Andhra Pradesh Societies Registration Act, 2001. 12. The activities of the Appellant were carried out for the collective interests of the owners of the villas viz., maintenance of the common property or area through representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es on the ruling of the Apex Court in the case of Secunderabad Club etc., vs CIT-V etc., [2023 LiveLaw (SC) 660], wherein it was held interest income earned on fixed deposits made in the banks by the clubs has to be treated like any other income from other sources within the meaning of Sec 2(24) of the Income Tax Act. The principle of mutuality would not apply to interest income earned on fixed deposits made by clubs in the banks, irrespective of fact whether the banks are corporate members of the club or not. 16. Having considered the rival contentions, we find that issue herein is squarely covered in favour of the Appellant by the ruling of the Apex Court in the case of State of West Bengal vs Calcutta Club Ltd (supra), wherein in the matter of service tax it has been held as follows : 71. With this background, it is important now to examine the Finance Act as it obtained, firstly from 16th June, 2005 uptil 1st July, 2012. 72. The definition of club or association contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave subsequently been reduced to the form of a document. If we construe the word constitute in the larger sense, as indicated above, the difficulty in which the Learned Chief Justice of the Calcutta High Court found himself, would be obviated inasmuch as the section would take in cases both of firms coming into existence by virtue of written documents as also those which may have initially come into existence by oral agreements, but which had subsequently been constituted under written deeds. 73. It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the respondents that incorporated clubs or associations or prior to 1st July, 2012 were not included in the Service Tax net. 74. The next question that arises is - was any difference made to this position post-1st July, 2012? 75. It can be seen that the definition of service contained in Section 65B(44) is very wide, as meaning any activity carried out by a person for another for consideration. Person is defined in Section 65B(37) as including, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of Service Tax changed so as to introduce a negative list for the first time post-2012, services were now taxable if they were carried out by one person for another person for consideration. Person is very widely defined by Section 65B(37) as including individuals as well as all associations of persons or bodies of individuals, whether incorporated or not. Explanation 3 to Section 65B(44), instead of using the expression person or the expression an association of persons or bodies of individuals, whether incorporated or not , uses the expression a body of persons when juxtaposed with an unincorporated association . 82. We have already seen how the expression body of persons occurring in the explanation to Section 65 and occurring in Sections 65(25a) and (25aa) does not refer to an incorporated company or an incorporated cooperative society. As the same expression has been used in Explanation 3 post-2012 [as opposed to the wide definition of person contained in Section 65B(37)], it may be assumed that the Legislature has continued with the pre-2012 scheme of not taxing members clubs when they are in the incorporated form. The expression body of person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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