M/S.Sterling Holiday Resorts Vs Union of India

M/s.Sterling Holiday Resorts (I) Limited, Represented by Sri.R.Mohan, Senior Vice President (Finance) Taurus Towers, 25, 1^st Main Road, United India Colony, Kodambakkam, Chennai-600 024.

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.. Petitioner in both WPs

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vs

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1.Union of India Represented by its Secretary, Department of Revenue, Ministry of Finance, Government of India, North Block, Secretariat, New Delhi.

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2.Commissioner of Service Tax 692, 6^th Floor, MHU Complex, Nandanam, Chennai. .. Respondents in both WPs

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Prayer in WP.No.10128 of 2008: PETITION filed under Article 226 of

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the Constitution of India praying for the issuance of Writ of Declaration,

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W.P.Nos.10128 & 10129 of 2008

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to declare the provisions of Section 65(105)(zzze) and Section 67(3) of the Finance Act, 1994 as ultra vires Article 14, 19(1)(g) and 265 in so far as the petitioner is concerned.

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Prayer in WP.No.10129 of 2008: PETITION filed under Article 226 of the Constitution of India praying for the issuance of Writ of Prohibition, prohibiting the 2^nd Respondent from taking any action pursuant to Show Cause Notice No.212/07 dated 22.10.07.

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(In both WPs) For Petitioner : Mr.Arvind P.Datar, Senior Counsel for Mr.P.R.Renganath For Respondents : M/s.Revathi Manivannan Central Government Standing Counsel

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COMMON ORDER

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(Order of the Court was made by Dr.ANITA SUMANTH.,J)

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The prayer in WP.No.10129 of 2008 is for a prohibition as against

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the 2^nd respondent being the Commissioner of Service Tax, Chennai from proceeding with show cause notice No.212 of 2007, dated 22.10.2007. In that notice, the 2^nd respondent proceeds to calls upon the petitioner to show cause why demand not be raised under Section 73(1) of the Finance Act, 1994 along with interest and penalty under appropriate provisions for the contravention of the provisions of Section 68 of the Finance Act,

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W.P.Nos.10128 & 10129 of 2008

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2.Both parties would accede to the position that an identical show

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cause notice had been issued to Mahindra Holidays and Resorts India Ltd. , that had come to be challenged in WP.Nos.29868 & 29869 of 2006, which writ petition has come to be allowed by order dated 05.06.2020 applying the ratio of the judgment of the Supreme Court in State of West Bengal and others v. Calcutta Club Limited [2019 (29) G.S.T.L. 545 (S.C.)]. The operative portion of the judgment of the Supreme Court as applied in the case of Mahindra also, is extracted below:

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'2. ................

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“83. The expression “unincorporated associations” would include persons who join together in some common purpose or common action – see ICT, Bombay North, Kutch and Saurashtra, Ahmedabad v. Indira Balkrishna (1960) 3 SCR 513 at page 519-520. The expression “as the case may be” would refer to different groups of individuals either bunched together in the form 75 of an association also, or otherwise as a group of persons who come together with some common object in mind. Whichever way it is looked at, what is important is that the expression “body of persons” cannot possibly include within it bodies corporate.

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84. We are therefore of the view that the Jharkhand High Court and the Gujarat High Court are correct in their view of the law in following Young Men’s Indian Association (supra). We are also of the view that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members’ clubs in the incorporated form.

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W.P.Nos.10128 & 10129 of 2008

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therefore dismissed. Writ Petition (Civil) 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’ clubs are declared to be void and of no effect in law.”

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3.The order passed in the case of Mahindra Holidays and Resorts

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India Ltd. has, admittedly, attained finality. Hence, applying the same ratio to the present case, show cause notice bearing No.212 of 2007 dated 22.10.2007 stands quashed. WP.No.10129 of 2008 is allowed.

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4.Coming to WP.No.10128 of 2008, the prayer is for a declaration that the provisions of Section 65(105)(zzze) and Section 67(3) of Finance Act, 1994 are ultra vires Articles 14, 19(1)(g) and 265 of the Constitution of India.

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5.Both parties agree that the challenge to Section 65(105)(zzze) is liable to be allowed in light of the judgment in the case of Calcutta Club (supra) .

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6.As far as Section 67(3) is concerned, as rightly contended by the Ms.Revathi Manivannan, learned Central Government Standing Counsel appearing for the Revenue, the Supreme Court has not had occasion to advert to that provision in either the case of Calcutta Club (supra) or any other case, for that matter.

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W.P.Nos.10128 & 10129 of 2008

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7.Since Mr.P.R.Renganath, makes an endorsement that the

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Declaration, qua Section 67(3) of Finance Act, 1994 is not pressed. WP.No.10128 of 2008 is thus dismissed qua Section 67(3) of Finance Act, 1994. Liberty is always available to assessees to challenge that provision in an appropriate case in a manner known to law. No costs. Connected miscellaneous petitions are closed.

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[A.S.M., J] [C.K., J] 24.03.2025

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Index:Yes Speaking order Neutral Citation:Yes vs

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To

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