TMI Blog2022 (11) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also issued by the said department. The questions raised in the Advance Ruling application dated 02.12.2020 and the issue pending in the referred investigation and the proceedings initiated are the same - There can be no doubt that the appellant had indeed not declared/ mis-declared the fact of initiation of proceedings clearly evidenced by GST DRC-01A Part A issued in this case and therefore this is also covered under the scope of the term 'suppression' as defined above. It was encumbent upon the appellant while making application for Advance Ruling, to have declared the true and complete facts, given the provisions of the GST law, in particular Sections 98(2) and 104 of the CGST Act, 2017. The invocation of Section 104 of CGST Act by the GAAR and declaring advance ruling dated 20.01.2021 void ab initio is legal - appeal dismissed. - GUJ/GAAAR/APPEAL/2022/22 - - - Dated:- 6-10-2022 - MILIND TORAWANE AND VIVEK RANJAN, MEMBER Present for the appellant : Shri Nilesh V Shuchak At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search proceeding under Section 67(2) of the Act on 05.06.2019. Search proceedings was continued till 06.06.2019. (ii) Many discrepancies including medicines, consumables and implants administered to in-patients has been considered as composite supply by the hospital and claimed exemption as health care services, were notices during search proceedings. Considering all these discrepancies, GST DRC-01A-Part A. was issued to the hospital for the period from 01.07.2017 to 31.05.2019 vide ref. no. 858, 859 and 860 dated 11.02.2020. (iii) Hospital had sought advance ruling on 02.12.2020 before the Advance Ruling Authority and Advance Ruling Authority had pronounced the Ruling on 20.01.2021. (iv) Therefore it is to bring to your kind notice that the proceeding is already pending in the given case before application is, filed with Authority of Advance Ruling. 5. In view of above, the GAAR invoked Section 104 of CGST Act and held personal hearing on 15.06.2021. The appellant submitted that according to their bonafide belief, they have not obtained the ruling by fraud or suppression of facts and ruling was pronounced after following due procedure laid down in law; that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto search proceedings under section 67(2) of the act on 05.06.2019, the search proceedings continued till 06.06.2019; thereafter issued three forms GST DRC-01A-Part A was issued, all dated 11.02.2020; Section 70(2) of CGST Act has deeming provision that every inquiry referred in subsection (1) shall be 'judicial proceeding' within the meaning of Section 193 and 228 of Indian Penal Code; therefore the subject inquiry initiated under Section 70 (1) of the SGST Act, 2017 is a judicial proceeding; the word 'any proceeding' under Section 98(2) of CGST Act will include investigation proceeding launched by state revenue as well as proceeding initiated vide GST DRC-01A Part A dated 11.02.2020; appellant choose not to declare the proceedings initiated vide GST DRC-01A and mis declared at Sr.No.17 of Form GS1 ARA-01; Advance Ruling cannot be used as a mechanism to nullify and frustrate the inquiry proceeding already initiated. 6.1 In view of above, the GAAR declared Advance Ruling No. GUJ/GAAR/R/11/2020 dated 20.01.2021 void ab-inito in terms of Section 104 of CGST Act. 7. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal. 7.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax (International Taxation) [2016 (387) ITR 437 (Delhi)] wherein it was observed that mere notice issued by an authority cannot be considered as jurisdictional bar for the AAR. (iv) The term 'proceeding' does not cover any and all steps/actions that department may take under the act. By applying principle of noscitur a sociis, it can be said that the term 'pending' has to derive color from the term 'decided' and 'proceedings' only includes any proceedings that may result in a decision i.e. in nature of show cause notice or order and cannot include mere inquiry/investigation initiate by investigating agencies such as enforcement wing, which are merely empowered to investigate and issue show cause notice. The appellant submitted that show cause notice is the point of commencement of any proceeding and to this relied upon the Master Circular No. 1053/02/2017-CX dated 10.03.2017 issued by CBIC and since no show cause notice is issued to them, there is no suppression of facts. Any presumption contrary to facts in impugned ruling is not legal and proper. The appellant further submitted that filing of application for advance ruling w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant in their additional submissions relied upon the judgment dated 17.08.2022 of Hon'ble High Court of Telangana in the case of M/s. Srico Projects Pvt. Ltd., Vs. Telangana State Authority for Advance Ruling Another . The appellant submitted that the impugned order or ruling dated 19.07.2021 that mechanically declares the Advance Ruling dated 20.01.2021 as void is not legal or proper as it has not properly considered their submissions. 8. During the course of personal hearing held on 08.09.2022, the authorized representative of the appellant reiterated the submissions made in their appeal and written submissions made. He submitted that no show cause notice has been issued to the appellant and therefore proceedings cannot be said to be initiated against them. He requested to set aside the order of GAAR and allow his appeal as the order of GAAR is not legal and proper. FINDINGS:- 9. We have carefully gone through and considered the appeal and written submissions filed by the appellant, submissions made at the time of personal hearing, Advance Ruling given by the GAAR and other material available on record. 10. The main issue to be decided is whether the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought certain crucial facts to the notice of the GAAR, which implied that, GAAR had been misled into admitting the application in as much as the appellant had withheld information regarding commencement of investigation against them on the issue raised by them in their application for advance ruling. 14. The relevant section 98(2) of CGST Act is reproduced below:- 98(2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Authority shall not admit the application where the question raised 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. 15. The appellant, in their grounds of appeal, stressed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer had issued a scrutiny notice and the main issue before the assessing officer in scrutiny proceedings is the same as before authority for advance rulings. The AAR had not agreed with above objection raised by Income Tax Department and had proceeded to give a ruling and the same ruling was challenged by Income Tax Department in Delhi High Court. The Delhi High Court observed that the revised return has been selected for scrutiny under computer aided selection system (CASS) and a notice dated 16.08.2018 under section 143(2) of the act had been issued. The admitted reason for selection of respondent's case for scrutiny was ''taxable income shown in revised return is less than the taxable income shown in original return and large refund has been claimed whereas the question admitted for ruling was Whether on the facts and circumstance of the case and in law, the Royalty receivable by the applicant from Crocs India Pvt Ltd for use of Intellectual Property Right relating to design, development, marketing, distribution etc would be taxable in the hands of applicant only at the time of actual receipt under Art. 12 of Agreement between India and Netherlands for avoidan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt are very different. M/s Srico Projects Pvt Ltd V/s Telangana State Authority for Advance Ruling [W.P. No. 26145 of 2022| The facts of the case are that the petitioner submitted application for advance ruling on 11.05.2019 on the question what would be the rate of tax on works contract services rendered by it to the Central Government Employees Welfare Housing Organisation. Thereafter, on 15.02.2021, DGGI, Hyderabad Zonal Unit issued letter to petitioner alleging short payment of GST on the same issue to which petitioner sought answer from Advance Ruling Authority. After time interval of three years from date of application, on 25.04.2022, authority issued notice to petitioner for scheduling personal hearing on 27.04.2022 and on 03.06.2022 the application was rejected. Hon'ble High Court, inter alia, observed that it is evident that notice was issued to petitioner by DGGI much after filing of application for advance ruling and the same cannot be a bar under the proviso to Section 98(2) of CGST Act and the question of petitioner informing the authority that it was being enquired into did not arise as the application was filed much prior point of time. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2021 issued by GAAR. it is clearly mentioned that in terms of Section 104 of CGST Act, 2017, if authority finds that the applicant has obtained the ruling by fraud or suppression of material facts or misrepresentation of fact, it may, by order, declare such ruling to be void ab-initio. The said letter dated 09.06.2021 also quoted the contents of Additional Commissioner of State Tax's letter dated 06.03.2021, which was also enclosed with the letter dated 09.06.2021 issued to the appellant. Therefore, we do not agree with this contention of appellant. 19. The appellant submitted that advance ruling is pronounced on 20.01.2021 and hence proviso to Section 98(2) which requires that the authority shall not admit the application where the question raised in application is already pending or decided in any proceedings in case of applicant under any provisions of CGST Act, should not be applicable and pronouncement of rulings implies that their application has been admitted after examining the application and records in terms of Section 98(2) and hence the question raised in the application was not reported to be pending or decided in any proceedings. After going through the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on raised in the application is not (tick)- a. Already pending in any proceedings in the applicant's case under any of the provisions of the Act b. Already decided in any proceedings in the applicant's case under any of the provisions of the Act 22. The appellant was aware of the fact that investigations/proceedings were initiated against them by the Gujarat State Tax department and further three GST DRC-01A Part A all dated 11.02.2020 were also issued by the said department. The questions raised in the Advance Ruling application dated 02.12.2020 and the issue pending in the referred investigation and the proceedings initiated are the same. We find that the appellant has obtained the advance ruling by suppressing these material facts. Explanation 2 under Section 74 of CGST Act, 2017 provides as under:- For the purposes of this Act, the expression 'suppression' shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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