TMI Blog2019 (6) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... s of judicial review. The prejudice to the petitioner is quite evident in the facts and circumstances of the present case. The petitioner has been faulted for not providing documentary evidences during the appeal proceedings. There is again, no dispute, that the petitioner was never called upon to produce such documentary evidences in the course of appeal proceedings. In effect, this means that an order adverse to the interests of the petitioner has been made by the Appellate Authority, even after agreeing the petitioner that the primary reasoning of the Advance Ruling Authority was not proper, without affording the petitioner opportunity to meet with or to clarify or to produce materials or documentary evidences which might have had a bearing on the new grounds ultimately relied upon by the Appellate Authority. This, according to us, involves failure of natural justice, thereby vitiating the decision making process leading to the making of the impugned order dated 2nd July 2018. We are satisfied that the Appellate Authority should have at least indicated to the petitioner that it proposed to take into consideration the new grounds and further, afford an opportunity to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, the petitioner, in its application dated 7th December 2017, after giving a gist of the proposed arrangement, sought for ruling of the Advance Ruling Authority upon applicability of GST to the following: a] Supply of coal or any other inputs on a job work basis by JSL to JEL; b] Supply of power by JEL to JSL; c) Job work charges payable to JEL by JSL. 6] The Advance Ruling Authority vide order dated 5 March 2018 ruled that the proposed arrangement did not qualify as job work primarily because the same amounted to manufacture as defined under Section 2(72) of the CGST Act. On this basis, the Advance Ruling Authority ruled that the proposed arrangement attracted GST. The operative portion of the Advance Ruling Authority s order dated 5th March 2018 = 2018 (5) TMI 763 - AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA reads thus: ORDER (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO. GST-ARA-05/ 2017/B-08 Mumbai, dt.05/03/18 For reasons as discussed in the body of the order, the questions are an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MGST Act 2017, we hold that: The processing undertaken by a person on the goods belonging to another registered person qualifies as job work even if it amounts to manufacture provided all the requirements under the CGST/MGST Act in this behalf, are met with. The transaction between the Appellant and M/s. JSL does not qualify for Job Work under Section 2(68) and Section 143 of the Said Act. The order of AAR stands modified in terms of the above order. The Appeal filed by M/s. JEL stands dismissed with above order. 10] Mr. Rafique Dada, the learned Senior Advocate for the petitioner, at the outset submits that since the Statute has provided for no further appeal against the orders of Appellate Authority, this Court, should examine the impugned orders on the basis of substantive merits, as otherwise, the impugned orders would bind the petitioner qua the proposed arrangement, for all times. He submits in other States, the proposed arrangement is treated as job work by the concerned authorities. He submits that the reasoning of the Appellate Authority in the context of new grounds is contrary to statutory provisions as well as ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the Appellate Authority upholding the conclusion of Advance Ruling Authority albeit, on different grounds. He submits that on the facts of the present case, the view taken by the two authorities is sustainable both on facts as well as on law. He submits that there was no violation of principles of natural justice and no such complaint of violation was ever made in the course of proceedings before the Appellate Authority. He submits that no opportunity was applied for by the petitioner to produce any additional material before the Appellate Authority and therefore, it is not open for the petitioner to now complain about denial of opportunity. For all these reasons, Mr. Jetly submits that this petition warrants dismissal. 13] Mr. H.B. Takke, the learned AGP for the State, supported the submissions made by Mr. Jetly and defended the impugned orders on the basis of the reasoning reflected therein. 14] The rival contentions now fall for our determination. 15] At the outset, we make it clear that we do not propose to examine the impugned orders on their substantive merits or demerits, merely because Statutes in question have not provided for any further ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , also held that in exercise of powers of judicial review of the decision of the Settlement Commission, the Court ought to be concerned with the legality of the procedure validity and not with the validity of the order itself. The Supreme Court referred to observations of Lord Hailsham in Chief Constable of the North Wales Police vs. Evans (1982) 1 WLR 1155, in which it is held that judicial review is concerned not with the decision but with the decision making process. 20] Therefore, in view of the aforesaid, we decline the invitation of Mr. Dada to go into the merits of the impugned orders, merely because the Statutes in question have not provided any further appeals in such matters. The challenge in this petition, will have to be examined by confining ourselves to the principles of judicial review, which, inter alia, will include the issue as to whether there has been a failure of natural justice at the appeal stage, thereby vitiating the decision making process leading to making of the impugned order dated 2nd July 2018. 21] As noted earlier, the perusal of the impugned order dated 5th March 2018 made by Advance Ruling Authority indicates that the primar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions dealing with advance rulings, such wider proposition urged by Mr. Dada cannot be accepted. The Appellate Authority, in a given case, may be entitled to uphold the conclusion of Advance Ruling Authority, albeit, for reasons other than reasons which prompted the Advance Ruling Authority to base its decision. Ultimately, the Appellate Authority is required to give its ruling on the question posed by taking into account the relevant circumstances and eschewing irrelevant ones. Therefore, if the Advance Ruling Authority may have missed a particular point, it is not as if the Appellate Authority is precluded from adverting to such point and basing its ruling on the same. 25] In Reckitt Colman of India Ltd (supra), the Supreme Court was concerned with adjudicatory proceedings, which, to a great extent, are adversarial in nature. It is in that context that the Supreme Court observed that an Appellate Tribunal is not competent to make out in favour of the Revenue, a case which the Revenue never canvassed or which the assessee was never required to meet. Such observations therefore, will have to be read in the context of adjudicatory proceedings, the scope of which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph 52 of the impugned order dated 2nd July 2018 = 2018 (7) TMI 511 - AUTHORITY FOR ADVANCE RULING - MAHARASHTRA , the Appellate Authority has observed thus: 52. In the matter before us, the appellant have not submitted the following: (i) The agreement or proposed agreement between M/s. JSL and M/s. JEL for the process of job work to understand about the quantity and value of the inputs being supplied by the principal and the amount and quantity of the inputs/material being used by the job worker to the inputs supplied by the principal to carry out the job work process. (ii) The detail manufacturing process of M/s JEL for production of Electricity mentioning the name, quantity and value of the inputs. (iii) The procedure/process for accounting for the inputs received from M/s. JSL by M/s. JEL and corelation thereof with the goods supplied after job work. Though it is not possible to ascertain the quantity and value of the material being utilized by the job worker in the conversion of coal provided by the principal into electricity accurately in absence of data before us, it can nevertheless be seen from the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the activity undertaken by M/s. JEL to convert Coal, to be supplied by M/s. JSL, in electricity is not covered under the definition of Job work in terms of the CGST Act. Since goods supplied by M/s. JSL will be utilized by M/s. JEL in manufacture of new commodity i.e. electricity (though attracting NIL rate of duty), the process is manufacture and the same will be considered as supply of goods and not service. 32] Again, from the aforesaid it is apparent that the petitioner has been faulted for not providing documentary evidences during the appeal proceedings, on the aspects set out in clauses (i),(ii) and (iii) above. There is again, no dispute, that the petitioner was never called upon to produce such documentary evidences in the course of appeal proceedings. In effect, this means that an order adverse to the interests of the petitioner has been made by the Appellate Authority, even after agreeing the petitioner that the primary reasoning of the Advance Ruling Authority was not proper, without affording the petitioner opportunity to meet with or to clarify or to produce materials or documentary evidences which might have had a bearing on the new grounds ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity was granted to the parties to make their submissions on this new question framed at the stage of disposal of the second appeal. In such circumstances, the Supreme Court ruled that the procedure adopted by the High Court was improper and the High Court was duty bound to give a reasonable opportunity of hearing the parties on the new question of law formulated in the second appeal. The Supreme Court held that the High Court was duty bound to put the parties to notice that the new question of law was proposed to be considered and grant time to the parties to respond such question of law so formulated. The Supreme Court held that failure to do so would constitute failure of natural justice and therefore, remand to the second Appellate Court, was in order. 36] Applying the aforesaid principles to the facts and circumstances of the present case, we are satisfied that the Appellate Authority should have at least indicated to the petitioner that it proposed to take into consideration the new grounds and further, afford an opportunity to the petitioner to place on record agreements or other documentary evidences referred to in paragraphs 52 and 56 of the impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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