In Brief
The Supreme Court held that the doctrine of mutuality continues to protect members' clubs from sales tax and service tax even after the 46th Constitutional Amendment. The Court clarified that Article 366(29-A)(e) applies only to unincorporated clubs, not incorporated ones like companies or cooperative societies. Since members of a club are the joint owners and the club acts as their agent, there is no sale between distinct persons. The landmark judgment in Young Men's Indian Association remains binding law. Consequently, show-cause notices and demand notices for service tax levied on incorporated members' clubs were declared void, protecting such clubs from tax liability on supplies to their members.
The lawyer headnote and full judgment text are available to registered users.