Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(SC) 1103

R.F.NARIMAN, SURYA KANT, V.RAMASUBRAMANIAN
State of West Bengal – Appellant
Versus
Calcutta Club Limited – Respondent

Advocates Appeared:
For the Parties:Madhumita Bhattacharjee, Srija Choudhury, K.M. Natraj, ASG Dhruv Agarwal, Nisha Bagchi, Sunita Rani Singh, D.L. Chidananda, Pooja Sharma, Sharath Nambiar, B. Krishna Prasad, B. V. Balaram Das, Shyam Divan, S.K. Bagaria, Amit Thakkar, Mahesh Agarwal, Shamik Sajanwala, Abhinav Agrawal, Udayaditya Banarjee, Yojit Mehra, E. C. Agrawala, Neerav Mainkar, Dhwani Mainkar, Anil Kumar Gautam, Arvind P. Datar, Amar Dave, Ajitsinh Jadeja, Pradhuman Gohil, Taruna Singh Gohil, Vikash Singh, Ranu Purohit, Shiva P., Dhruraj Rana, Devang Nanavati, Pradhuman Gohil, Vikash Singh, Krishal H. Patel, Taruna Singh Gohil, Ranu Purohit, Shiva P., Jaideep Gupta, Rana Mukherjee, Partha Sil, Tavish B. Prasad, Lakshmi N. Kaimal, Rajesh Kumar, Sunita Rawat, Rahul Krishna, S.K. Kulkarni, M. Gireesh Kumar, Ankur S. Kulkarni, Nakul Dewan, Ejaz Maqbool, Akriti Chaubey, Kunwar Aditya Singh, Gautam Prabhakar, V. Raghuraman, Anand Sukumar, S. Sukumaran, Bhupesh Kumar Pathak, Mrs. Meera Mathur, Rajeev Singh, M/s. S. Narain & Co., Prateek Chadha, Pratap Venugopal, Surekha Raman, Viddusshi, Akhil Abraham Roy, For M/s. K J John And Co, Ajay Kumar, Vijay Goswami, Ranjith Kumar, Shivam Ojha, Charanya Lakshmikumaran, V. Lakshmikumaran, Karan Sachdev, Aaditya Bhattacharya, Apeksha Mehta, Ishita Mathur, Mounica Kasturi, Punit Dutt Tyagi, M. P. Devanath, P.K. Sahu, Prashant Shukla, Kedar Nath Tripathy, J.K. Mittal, Vandana Mittal, Praveen Swarup, Advocates

Judgement Key Points

Key Points: - The doctrine of mutuality continues to apply to both incorporated and unincorporated members’ clubs after Article 366(29-A) (p_207) - Sub-clause (e) does not apply to the taxed status of members’ clubs; sub-clause (f) pertains to food/drink in hotels/restaurants and not to members’ clubs (p_207, p_208, p_43, p_188) - Incorporated clubs’ service tax liabilities were not included in the pre-2012 regime and post-2012 the interpretation relies on changes to Section 65B definitions and Explanation 3, with courts in Jharkhand and Gujarat holding exemption for incorporated clubs in certain contexts (p_73, p_57, p_78, p_81, p_84)

What is the status of the doctrine of mutuality for members’ clubs after the 46th Amendment’s Article 366(29-A)?

What is the applicability of sub-clause (e) and sub-clause (f) of Article 366(29-A) to members’ clubs, incorporated or unincorporated?

Do service tax provisions apply to incorporated members’ clubs post-2012 and what is the effect on recoveries or notices?

JUDGMENT :

R.F. Nariman, J.

C.A. No.4184 of 2009

1. This Appeal arises out of a reference order by a Division Bench of this Court, reported in State of West Bengal v. Calcutta Club Limited (2017) 5 SCC 356. The facts of Civil Appeal No.4184 of 2009 are set out in the said reference order as follows:

“2. The facts that are necessary to be stated are that the Assistant Commissioner of Commercial Taxes issued a notice to the respondent Club assessee apprising it that it had failed to make payment of sales tax on sale of food and drinks to the permanent members during the quarter ending 30-6-2002. After the receipt of the notice, the respondent Club submitted a representation and the assessing authority required the respondent Club to appear before it on 18-10-2002. The notice and the communication sent for personal hearing was assailed by the respondent before the Tribunal praying for a declaration that it is not a dealer within the meaning of the Act as there is no sale of any goods in the form of food, refreshments, drinks, etc. by the Club to its permanent members and hence, it is not liable to pay sales tax under the Act. A prayer was also made before the Tribunal for nullifying the a

Click Here to Read the rest of this document

2019 Supreme(SC) 1103

R.F.NARIMAN, SURYA KANT, V.RAMASUBRAMANIANState of West Bengal – AppellantVersusCalcutta Club Limited – Respondent

What is the status of the doctrine of mutuality for members’ clubs after the 46th Amendment’s Article 366(29-A)?

What is the applicability of sub-clause (e) and sub-clause (f) of Article 366(29-A) to members’ clubs, incorporated or unincorporated?

Do service tax provisions apply to incorporated members’ clubs post-2012 and what is the effect on recoveries or notices?

Cases Referred (19)

R.F.NARIMAN, SURYA KANT, V.RAMASUBRAMANIAN
State of West Bengal – Appellant
Versus
Calcutta Club Limited – Respondent