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TMI Blog2019 (12) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.2018 = 2018 (12) TMI 227 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, which was disposed of vide AAAR Order No. MAH/AAAR/SS-RJ/26/2018-19 dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA. However, the Appellant filed the application under section 102 of the CGST Act, 2017 on 23.08.2019 for the rectification of the ruling dated 22.03.2019, issued by AAAR on the following grounds: (i) It was alleged by the Appellant that the Appellate Authority for the Advance Ruling had committed an error of law, apparent on the face of record, in as much as while disposing the case, it had not applied its mind to the provisions of law, which gives it a jurisdiction to act in a particular manner. To support their contention, they drew analogy between the provisions laid out in section 102 of the CGST Act, 2017 governing the rectification of the advance ruling and the provisions of the Review Power enumerated in Order XLVII of the Civil Procedure Code 1908 by placing emphasis on the similar phraseologies i.e. "any error apparent on the face of record" used in section 102 of the CGST Act, 2017 and "mistake or error apparent on the face of the record" used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e place of supply" under section 97(2) of the CGST Act, 2017. (ii) They further alleged that the Appellate Authority had also /failed to appreciate the ramification of the CBIC Circular No. 107/29/2019 -GST dated 18.07.2019, which clarifies the issues relating to the "intermediary services" in as much as the definition of intermediary inter alia provided specific exclusion of a person i.e. that of a person who supplies such goods or services or both or securities on his own account. Therefore, the supplier of services would not be treated as "intermediary" even where the supplier of services qualifies to be an agent/broker or any other person, if he is involved in the supply of services on his own account. They further pleaded that had the Appellate Authority considered and applied the aforesaid Board Circular, then the self-evident answer would have emerged, wherein the Appellant, though an "intermediary" was covered by specific exclusion of a person i.e. that of a person who supplies such goods or services or both or securities on his own account as per the clarification of the aforesaid Board Circular, and accordingly, the activities of the Appellant would have been covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, wherein he reiterated the aforesaid submissions, as well as made additional submissions during the personal hearing, which was on the same line as that of the aforesaid submissions except the submissions on the determination of the jurisdiction with respect to the questions asked by the Appellant in their advance ruling application. To corroborate their claim as to the Appellant Authority had the jurisdiction to decide even the place of supply of the goods or services or both, for the purpose of the determination of the liability to pay tax on any goods or services or both as laid out under section 97(2)(e) of the CGST Act, they cited a Supreme Court Judgment in the case of Smt. Ujjam Bai Vs. State of U.P., pronounced on 10.04.1962 = 1962 (4) TMI 90 - SUPREME COURT. The Appellant, further, requested to file additional submissions in this regard, which we agreed to. Subsequently, the Appellant filed the additional submissions on 27.11.2019, and subsequently on 06.12.2019 as well and requested to pass the final order after due consideration of al! the additional and supplementary submissions filed by them. Additional submissions filed on 27.11.2019 1. Attention was drawn to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these words: "To conclude, it can be stated that the law makes a comprehensive provision for Advance Rulings to ensure that disputes are minimal....... The aim is to provide certainty to the tax payer with respect to his obligations under the GST Act and an expeditious ruling, so that the relationship between the tax payer and administration is smooth and transparent and helps to avoid unnecessary litigation". * The abortive Order dated 22-03-2019 did exactly the opposite!! 6. In the end: (a) It was submitted that it was perfectly lawful for this Honorable Appellate Authority to correct the order already passed based on the law declared by the High Court/Supreme Court, on a date subsequent to the date of the passing of the order, because the law so declared is always retrospective in effect from the date the statutory provision existed. (b) On parity of reasoning, a clarificatory binding circular issued under section 168 (1) of the CGST Act,2017, is also having retrospective effect, as the Board's Circular merely expounds what the statutory provision, (connotation of "intermediary" and "intermediary services") really meant and was/is expected to be so implemented. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egards matters that are res judicata, or accounts that have been settled in the meantime." (iii) Hon'ble Punjab and Haryana High Court have in the case of Commissioner of Income Tax vs. Smt. Aruna Luthra [2001] 170 CTR 0073 (P&H) = 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT held as under: "A Court decides a dispute between the parties. The cause can involve decision on facts. It can also involve a decision on a point of law. Both may have bearing on the ultimate result of the case. When a Court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of the promulgation of the law. The declaration is - This was the law. This is the law. This is how the provision shall be construed." (iv) In this regard, recently Hon'ble Supreme Court in the case of Mepco Industries Ltd. Vs. CIT [2009] 319 ITR 208 (SC) = 2009 (11) TMI 24 - SUPREME COURT, has held as under: "In case subsequent judgment lays down a principle of law, then it will be applicable across the board and based on the same rectification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "intermediary services". Obviously, the Circular is clarificatory in nature and shall apply retrospectively". * The settled law is as follows: * In Zile Singh v. State of Haryana and Ors. [2004 (8) SCC] = 2004 (10) TMI 553 - SUPREME COURT the Honorable Supreme Court held: The presumption against retrospective operation is not applicable to declaratory statutes .In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended.... An amending Act may be purely declaratory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect. (ibid, pp.468-469). 9. From the above discussion, it is manifestly clear that the Law declared by the Constitutional Court or the Board's Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 04-12-2019 and "NOT retrospectively" as stated: "hereby withdraws, ab-initio Circular No. 107/26/2019-GST dated 18.07.2019. (b) That the Section 168(1) of the CGST Act does not confer on the Board any "legislative power like farming Rules or Regulations", but admittedly and ex-facie the power to be exercised is "administrative/executive" in nature: "to ensure uniformity in the implementation of the provisions of the law across field formations", an Administrative duty or function. (c) That the Rajasthan High Court, in Gopi Krishna vs. State of Rajasthan on 6 February, 1987, (1987 WLN UC 276) succinctly stated: QUOTE: 17. A distinction is to be drawn between administrative/executive order or circular and the rules framed in exercise of the powers given under some Act. Such rules have statutory force and can be made effective retrospectively or prospectively as the circumstances require, Even rules cannot be effective retrospectively in all cases, as is evident from the following principle enunciated by Hon'ble the Supreme Court in the case of the Accountant General and another v. S. Doraiswamy and Ors. : It is settled law that unless a statute conferring the power to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simple terms is explained as a firm or a person who acts as a link between parties for conducting business. Applicant is providing services as Intermediary. 16. As per section 2(13) of the IGST act 2017 "Intermediary" means a broker, an agent or any other person by whatever name called, who arranges or facilitates the supply of goods or services or both or securities between two or more persons, but does not include a person supplies such goods or services or both or securities on his own account. 17. From above we find that "Intermediary" means a broker, an agent or any other person who arranges or facilitates the supply of goods or services or both between two or more persons and who cannot change the nature of supply as provided by the Principal. 18. MI is covered by the said definition of "Intermediary" because they are acting as a facilitator for the process of sale of material by their foreign Principals to the Indian parties because they locate the customer, negotiate the prices and ensure the probable sale. They also provide discount to the said customers out of the commissions received by them as mentioned in the purchase orders. It is very clear from the facts of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the /GST Act read with section 2(65) of the MGST Act attracting CGST/MGST? And if so what rate? 26. It would be necessary to discuss interstate provisions as well as intrastate provisions under the GST laws: 27. Section 7 of the Integrated Goods and Service Tax Act 2017 covers the interstate provisions. As no specific provisions are applicable for determining tax rate, residuary provision under section 7(5)(c) shall be made applicable in the case of Intermediary service. This section states that interstate supply of goods or services or both in the taxable territory shall be treated to be a supply of goods or services or both in the course of interstate trade or commerce. However, the same should not be an intrastate supply and should not be covered elsewhere under section 7 of the IGST act. 28. Section 8 of the Integrated Goods and Services Tax act 2017 deals with the provision of intra state. Applying the provisions of section 8(2) which states that subject to the provisions of section 12, in case where the location of supplier and the place of supply of services are in the same state or in the same union territory the supply of service shall be treated as intra state supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA as envisaged under section 102 of the CGST Act, 2017. 33. In order to buttress their submissions as to the AAAR Order dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA does have apparent errors on the face of the record, first, the Appellant drew analogy between the provisions laid out in section 102 of the CGST Act, 2017 governing the rectification of the advance ruling and the provisions of the Review Power provided in Order XLVII of the Civil Procedure Code 1908 by placing emphasis on the similar phraseologies i.e. "any error apparent on the face of record" used in section 102 of the CGST Act, 2017 and "mistake or error apparent on the face of the record" used in Rule 1, Order XLVII of CPC, 1908, thereby, arguing that since the aforesaid phraseologies used in the section 102 of the CGST Act, 2017 and Rule 1 of the Order XLVII of CPC, 1908 are similar, the case laws pertaining to the Review matters would reasonably be applicable to the matter related to the rectification of the advance ruling. For the said purpose, they cited few judicial pronouncements, which are being mentioned herein bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediary services as defined under section 2(13) of the IGST Act, 2017 or not. Hence, the allegation levelled by the Appellant as to the Appellate Authority had not applied its mind to true purport of the expression "intermediary services" is without merit, and therefore, not sustainable 36. As regards the Appellant's contention that the subject issue raised by the them regarding the determination of the export of service would be covered under section 97(2)(e) of the CGST Act, 2017, we would like to examine the aforesaid provision, which is being reproduced herein under: (2) The question on which the advance ruling is sought under this Act, shall be in respect of, (a)................ (b)................ ...................... (e) determination of the liability to pay tax on any goods or services or both; ..................... Here, it is pertinent to mention that under the GST law, there are certain goods and services, which have declared either as non-taxable supplies or as an exempt supply in terms of section 2(78) and section 2(47) of the CGST Act, 2017. While Schedule Ill to the CGST Act, 2017 enumerate the activities or transactions which shall be treated neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hankar pal and Another Vs. Anath Nath Mitter and others [1949 FCR 36] = 1949 (1) TMI 8 - FEDERAL COURT, a Five Judges Bench of the Federal Court (predecessor Court to the Supreme Court), while considering the question whether the Calcutta High Court was justified in not granting relief to non-appealing party, whose position was similar to that of the successful appellant, held : "That a decision is erroneous in law is certainly no ground for ordering review. If the Court has decided a point and decided it erroneously) the error could not be one apparent on the face of the record or even analogous to it. When, however, the court disposes of a case without adverting to or applying its mind to a provision of law which gives it jurisdiction to act in a particular way, that may amount to an error analogous to one apparent on the face of the record sufficient to bring the case within the purview of Order XLVII, Rule 1, Civil Procedure Code." In Parsion Devi and Others Vs. Sumitri Devi and Others [1997 (8) SCC 715] = 1997 (10) TMI 369 - SUPREME COURT, it was held as under: - "Under Order 47 Rule 1 CPC a judgment may be open to review inter alia if there is a mistake or an error appar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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