9911796707
TMI Blog2021 (2) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... ga Projects & Infrastructure Pvt Ltd, No 125/1-18, GK Arcade, T. Mariyappa Road, 1st Block, Jayanagar, Bangalore 560011 (herein after referred to as Appellant) against the ROM order No. KAR/ROM03/2020 dated 11th Sept 2020. Brief Facts of the case: 3. Appellant is engaged in the business of property development i.e construction and sale of residential apartments. Appellant had executed projects under JDA with land owners for an agreed ratio of built-up area. Construction was commenced during pre-GST period and continued under GST regime. 4. On account of implementation of GST, Appellant approached the Authority for Advance Ruling (AAR) seeking a ruling on the following question: Whether Applicant is liable for GST towards work executed under JDA on land owner's portion where work commenced during pre-GST and continued under GST law? If tax is applicable the valuation for payment of tax. 5. The AAR vide its order KAR ADRG No 17/2019 dated 25th July 2019 = 2019 (8) TMI 395 - AUTHORITY FOR ADVANCE RULING, KARNATAKA gave the following ruling: The Applicant is liable to pay GST towards work executed under Joint Development Agreement on Land owner 's port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration between land owner and developer, work executed by the developer to the extent of land owner's built up area against receipt of undivided interest in land amounts to barter / exchange and does not attract tax under KVAT law. They submitted that as per the Service Tax law - Rule 3 of the Point of Taxation Rules, 2011, the point of taxation is the earliest of the following: a) Date of issue of invoice for service provided b) If invoice is not issued within 30 days of completion of provision of service, then it is the date of completion of provision of service; c) If payment is received before the date of issue of invoice or completion of service, then it is the date of receipt of payment. In this regard they submitted that in case of transactions between landlords and developer, usually there is no system of issue of invoices; that therefore, out of the above three events listed, the date of receipt of consideration or date of completion of service would be relevant in case of JDA; that as per Rule 3 of Taxation Rules, 2011, the point of taxation is the date on which the development rights are received by builder / developer, as the developer gets the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal on the grounds that the Appellant firm was short of manpower as most of the employees were working from home on account of the pandemic and the management could not take the decision to file an appeal in time. PERSONAL HEARING 9. The appellant was called for a virtual hearing on 14th December 2020 and the same was conducted on the Webex platform following the guidelines issued by the CBIC vide Instruction F.No 390/Misc/3/2019-JC dated 21st August 2020. The Appellant was represented by their Chartered Accountant Shri. Srikanth Aacharay G.B who gave a brief about the facts of the case and reiterated the submissions made in the grounds of appeal. He submitted that the applicant filed an application for rectification of the advance ruling alleging that the authority has given a ruling in the case of M/s Nforce Infrastructure India Pvt Ltd wherein on similar set of facts it was held that GST is payable only on the proportionate service supplied after 30-06-2017. Further the ROM application sought to rectify the ruling given with regard to valuation on the grounds that the provisions of Para 2 of Notf 11/2017 CT (R) cannot be made applicable to construction service provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the Income Tax Appellate Tribunal decision in the case of Ashu Engineers & Plastics Pvt Ltd in A.No 3453/Mum/2010 as well as the Supreme Court decision in the case of Kundan Lal Srikishan vs Commissioner of Sales Tax U.P and Ors reported in [1987] 65 STC 62 (SC) = 1987 (2) TMI 448 - SUPREME COURT wherein it was held that the period of limitation for the application for rectification has to be calculated from the date of the order passed under Section 21 of the UP Sales Tax Act. Applying the ratio of the above decisions, the Appellant submitted that the limitation for appeal shall be calculated from the date of rectification order and not from the date of the original order. 9.4. The Appellant further submitted that they had filed the rectification application on 27-09-2019 which was well within the time prescribed for filing appeal under Section 100 of the CGST Act; that the lower Authority took almost one year to complete the rectification proceedings and therefore the limitation for filing appeal commences from the date of receipt of rectification order. They also made a plea that since the lower Authority had made an observation in para 5.4 of the rectification order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act: Provided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant: Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. (3) A copy of every order made under sub-section (2) shall be sent to the applicant and to the concerned officer. (4) Where an application is admitted under sub-section (2), the Authority shall, after examining such further material as may be placed before it by the applicant or obtained by the Authority and after providing an opportunity of being heard to the applicant or his authorised representative as well as to the concerned officer or his authorised representative, pronounce its advance ruling on the question specified in the application. (5) Where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mistake (ROM) in the advance ruling dated 25-07-2019. The ROM application was filed on the grounds that the Authority had given a different ruling in their case when compared to the ruling given vide Order No 30/2018 dt 30-11-2018 = 2018 (12) TMI 534 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA in the case of advance ruling application filed by M/s Nforce Infrastructure when the facts and circumstances in both cases were the same. This ROM application was not admitted by the lower Authority and was rejected vide order dated 11-09-2020, in terms of Section 98(2) of the said Act for the reason that the lower Authority had considered all the submissions and facts and pronounced a ruling on all questions of the applicant and there was no error/mistake which was apparent on record. It is against this rejection of ROM vide order dated 11-09-2020 that this appeal has been filed before us. 15. A reading of the above provisions of law makes it clear that an appeal can be filed before the Appellate Authority only against an advance ruling pronounced in terms of Section 98 (4). In this case, the ruling pronounced in terms of Section 98(4) is the advance ruling order No. KAR ADRG 17/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ype of order which can be appealed against and the time period for filing the appeal are clearly laid down. Therefore, we hold that the order passed by the lower Authority rejecting the ROM application is not an order which can be appealed before us. 16. The Appellant has also relied on the Supreme Court decision in the case of Kundan Lal Srikishan vs Commissioner of Sales Tax U.P and Ors reported in [1987] 65 STC 62 (SC) = 1987 (2) TMI 448 - SUPREME COURT and also the decision of the Income Tax Appellate Tribunal, Mumbai in the case of Ashu Engineers & Plastics Pvt. Ltd. to but trees their argument that even though the rectification application got rejected by the lower Authority the advance ruling order passed under Section 98(4) is admissible for appeal and the time limitation shall be calculated from the date of the rectification order and not from the date of the original order. We have gone through both the above referred decisions and find that the issues discussed therein relate to how the time limitation for filing the rectification of mistake application should be considered. This is not the issue in the instant appeal and hence the above referred decisions do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be read subject to the corrections/modifications made by the rectification order. The correction is incorporated in the original order, as for example, where merely a figure is altered or typographical correction is made. However, having regard to the nature of original order and rectification order, if the correction cannot be incorporated in the original order, the rectification becomes an addendum to the original order, both being read together...." 18. From the above, it is clear that even in cases where a rectification of mistake application is admitted and a mistake apparent on record is corrected, the original order is not set aside. The original order remains on record and only the mistakes are corrected therein. The principle of doctrine of merger will not apply in such cases. Any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes. The ROM rejection order does not merge with the original advance ruling order. The original advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
