Page 168 - GSTL_2nd July 2020 _Vol 38_Part 1

86 GST LAW TIMES [ Vol. 38
eration cannot be presumed in every money flow …… The factual ma-
trix of the existence of a monetary flow combined with convergence of
two entities for such flow cannot be moulded by tax authorities into a
taxable event without identifying the specific activity that links the pro-
vider to the recipient.
12. ….. Unless the existence of provision of a service can be es-
tablished, the question of taxing an attendant monetary transaction will
not arise. Contributions for the discharge of liabilities or for meeting
common expenses of a group of persons aggregating for identified
common objectives will not meet the criteria of taxation under Finance
Act, 1994 in the absence of identifiable service that benefits an identified
individual or individuals who make the contribution in return for the
benefit so derived.
13. ….. Neither can monetary contribution of the individuals
that is not attributable to an identifiable activity be deemed to be a con-
sideration that is liable to be taxed merely because a “club or associa-
tion” is the recipient of that contribution.
14. ….. To the extent that any of these collections are directly
attributable to an identified activity, such fees or charges will conform to
the charging section for taxability and, to the extent that they are not so
attributable, provision of a taxable service cannot be imagined or pre-
sumed. Recovery of service tax should hang on that very nail. Each cat-
egory of fee or charge, therefore, needs to be examined severally to de-
termine whether the payments are indeed recompense for a service be-
fore ascertaining whether that identified service is taxable.’
19. We are accordingly of the view that activities undertaken by a
partner/co-venturer for the mutual benefit of the partnership/joint venture
cannot be regarded as a service rendered by one person to another for con-
sideration and therefore cannot be taxed.”
(emphasis supplied)
16. Not satisfied with the aforesaid judgment of the Tribunal, the De-
partment filed a Special Leave Petition in the Supreme Court, which was con-
verted into Civil Appeal with Diary No. 33259 of 2018. The Supreme Court dis-
missed the Civil Appeal both on the ground of delay as well as on merits [2018
(19) G.S.T.L. J118 (S.C.)]. Once the Civil Appeal was dismissed on merits, the or-
der of the Tribunal merged in the order of the Supreme Court.
17. Such being the position, the impugned order can be set aside only
on this ground alone as no service was provided by the appellant to Career
Launcher so as to attract payment of any Service Tax.
18. However, as the Commissioner has dealt with other issues and the
Learned Counsel for the appellant and the Learned Authorized Representative of
the Department have made submissions on other alternative issues, it is consid-
ered necessary to examine these issues also.
19. The first alternative submission of the Learned Counsel for the
appellant is that even if it is assumed that a service was rendered by the appel-
lant, then too the appellant would be entitled to the benefit of Notification dated
10 September, 2004 by which the Central Government exempted taxable service
provided to a client by any other person in relation to “business auxiliary ser-
vice” in so far as it related to a provision of service on behalf of a client and pro-
vided in relation to education.
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