This Appeal arises out of a reference order by a Division Bench of this Court, in State of West Bengal v. Calcutta Club Limited (2017) 5 SCC 356. . Three\u00a0 questions to be answered by a larger Bench as follows: \u201c(i) Whether the doctrine of mutuality is still applicable to incorporated clubs or any club after the 46th Amendment to Article 366(29-A) of the Constitution of India? 30.2. (ii) Whether the judgment of this Court in Young Men’s Indian Assn. [CTO v. Young Men’s Indian Assn., (1970) 1 SCC 462] still holds the field even after the 46th Amendment of the Constitution of India; and whether the decisions in Cosmopolitan Club [Cosmopolitan Club v. State of T.N., (2017) 5 SCC 635 : (2009) 19 VST 456 (SC)] and Fateh Maidan Club [Fateh Maidan Club v. CTO, (2017) 5 SCC 638 : (2008) 12 VST 598 (SC)] which remitted the matter applying the doctrine of mutuality after the constitutional amendment can be treated to be stating the correct principle of law? 30.3. (iii) Whether the 46th Amendment to the Constitution, by deeming fiction provides that provision of food and beverages by the incorporated clubs to its permanent members constitute sale thereby holding the same to be liable to sales tax?\u201d<\/p>\n
After considering various case laws the Court held that a\u00a0 club registered as a ‘company’ u\/s 25 of Companies Act is not like other companies as it has no shareholders, no dividends declared, and no distribution of profits takes place. Such clubs cannot be treated as separate in law from their members. The ratio decidendi in Bacha F. Guzdar\u00a0 v.CIT (1955 ) 27 ITR 1 does not apply to such clubs. When a club supplies goods to its members, there is no “sale” and sales-tax cannot be levied (Bangalore Club v.CIT \u00a0(2013) \u00a0350 ITR 509 (SC), ITO v.Venkatesh Premises Co-operative\u00a0 Society Ltd ( 2018) 402 ITR 670 (SC)\u00a0 Court also held that <\/strong>\u00a0,from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members\u2019 clubs in the incorporated form.\u00a0 The appeals of the Revenue are, therefore dismissed. WP (C) 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\u2019 clubs are declared to be void and of no effect in law. ( CA No..4184 of\u00a0 2009 , dt. 03.10.2019)<\/p>\n","protected":false},"excerpt":{"rendered":" West Bengal Sales Tax Act , 1994 -Service tax \u2013 Finance Act 1994 .
\nS.2(30): Club-Mutuality -A club registered as a ‘company’ u\/s 25 of Companies Act is not like other companies as it has no shareholders, no dividends declared, and no distribution of profits takes place-.Such clubs cannot be treated as separate in law from their members- when a club supplies goods to its members, there is no “sale” and sales-tax cannot be levied- From 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members\u2019 clubs in the incorporated form. [S. 2(5), 2(10) 2(30), Constitution of India , Art . 366 (29-A), 367 , , Contract Act , 1872, S. 2(d) , Companies Act ,1956 , S. 25(1)(b) , Income -tax , 1961 ,S. 2(24)(vii) , 2(31),44, 45 , Indian Contract Act 1872 , S .2(d) , General Clauses Act , 3 (42) , Finance Act , 1994 , S. 65 (105) (zze ), 65B (37), 66B ,66D 68 ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8132","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-27a","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=8132"}],"version-history":[{"count":3,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8132\/revisions"}],"predecessor-version":[{"id":8400,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/8132\/revisions\/8400"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=8132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=8132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=8132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}