Case Law Details
Case Name : Delhi Chit Fund Association Vs Union of India & Anr. (Delhi High court)
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All High Courts Delhi High Court
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Issue- The short question which arises in this writ petition is whether the provision of services in relation to conducting a chit business is a taxable service for the purposes of section 65B(44) of the Finance Act, 1994 inserted w. e. f. 1 st July, 2012.
The petitioner prays that the notification No.26/2012-ST dated 20.06.2012 should be quashed
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LIC is providing a service for a consideration be it money or something else. So the service is taxable. but if a bank collects insurance charge in money and pass it to an insurance company it is not the bank but the insurance company which provides service. So bank is not liable to pay service tax but the company is.
The court is correct in interpreting the law.
By the same logic, LIC also deals in money and there should not be any service or the bank providing remittance facility through DD or RTGS provides no service as it is transaction in money alone. The foreman puts the group together, collects monthly subscription, arranges monthly auction and makes distribution to the auction winner. For this service he gets a remuneration. Thus it seems to meet all the four requisites of service. Further, an exeption needs to be construed strictly.
With all due respects, the judgment seems to be based on incorrect premise and its correctness is debatable.