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TMI Blog2024 (10) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore. unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the Same provisions under the Tamil Nadu Goods and Service Tax Act. 1. The applicant submitted a copy of challan dated 24.06.2022 evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. The online application form for advance ruling dated 27.06.2022 was physically received on 28.06.2022 as mandated under Rule 107A. 2.1 The Tamil Nadu Nurses and Midwives Council (hereinafter referred to as "Applicant") was formed under The Tamil Nadu Nurses and Midwives Act, 1926, It is an act to provide for registration of Nurses, Midwives, Health Visitors, auxiliary Nurse-Midwives and Dhais in the State of Tamil Nadu. 2.2 The said Act vide Section 11, inter alia, provides for regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 73 and 74 of the Act under various situation; one among the situation is inspection/survey by the department U/s 67; GST officials inspected their council office and called for certain details; personal hearing was made and were collected including summon issued for which Registrar attended and gave her statement. Only inspection was done by the department under section 67 Which is only a process to initiate the proceedings and a proceeding under GST Act. Further no SCN or order was issued before the application filed for AAR on 28/06/2022 and no notice was served on the applicant for initiation of proceedings under section 73 and 74 of the GST Act. Therefore, the applicant is eligible for a ruling from Authority for Advance Ruling. 2.7 The applicant also made a claim that the functions entrusted to the applicant by the Government of Tamil Nadu come under public health as stated in Sl. No.6 of Article 243W of the Constitution of India. The said service to the government qualifies for exemption as pure service to government vide Sl. No. 3 of Notification No. 12/2017-CT dated 28.06.2017. 3. The applicant was given an opportunity to be virtually heard on 12.01.2023. Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant on the issues raised by the applicant in the ARA application and for comments on the issues raised. 4.2 The concerned State Authority vide letter RC No. 524/2022/A4 dated 03.08.2022, inter alia, stated that Tamil Nadu Nurses and Midwives Council is an autonomous body. As per GST Act, a statutory body, corporation or an authority created by the parliament or a State Legislature is neither 'Government' nor a local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53 (3) (b) and article 154 (2) (b) of the Constitution respectively. They are separate from the State and cannot be regarded as the Central or a State Government and also do not fall in the definition of 'local authority'. Thus, regulatory bodies and other autonomous entities would not be regarded as the Government or local authorities for the purpose of GST Acts. Therefore it was stated therein that the Council which is a regulatory body is liable to be registered under GST Act, 2017. 4.3 The said State authority relied on Student's Registration fee structure and various fee prescribed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement dated 14.06.2022 recorded from Dr. S. Ani Grace Kalaimathi, Registrar of Tamil Nadu Nurses and Midwives Council. (v) Incident Report No. 89/2022 dated 24.06.2022 signed by the Principal Additional Director General, DGGI, Chennai Zonal Unit, Chennai; wherein non-payment of GST to the tune of Rs. 474 lakhs on the consideration for the supply under section 7 of the CGST Act, 2017 in the form of fees collected, which is not exempted by any notification, has been pointed out. 6.1 As it was apparent that the first proviso to Section 98 (2) of the CGST Act, 2017, covers any 'proceedings' in the case of an applicant under any of the provisions or the Act including Section 70 of the Acts and as an investigation was being conducted by DGGI, Chennai Zonal Unit during the relevant point of time, the advance ruling application filed by the applicant was rejected vide Advance Ruling No. 17/ARA/2023 dated 19.06.2023. 6.2 Aggrieved, the applicant filed an appeal before the Appellate Authority for Advance Ruling, Tamilnadu, who vide Order-in-Appeal No. AAAR/05/2023 (AR) dated 09.12.2023, remanded the matter back to the Lower Authority for consideration and passing of appropriate orders, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings. Section 70 refers to proper officer who has the power to summon persons to give evidence and produce documents. The proper officer under GST is not a judge and the summoning under Section 70 of the CGST Act is not a quasi-judicial proceeding. * A deeming provision is therefore added to give power to the proper officer under Section 70 for matters arising during the process, viz, false evidence, intentional insult or interruption to public servant, and the word proceeding used in Section 70 is restrictive and confined to issues relating to investigation/ survey process and hence at any stretch of imagination construe as any proceedings under GST Act. * Based on the above, Section 70 (2) only confers the power under clauses 193 and 228 of IPC for punishment referred, and therefore 70 (2) does not fall under any proceedings referred to in Section 98 (2). Further it is a settled principle of interpretation of taxing statute that a deeming provision has to be interpreted strictly in terms of the language employed. It is also cardinal principle that a deeming fiction over a deeming fiction cannot be applied. * Deeming provisions creates a legal fiction. This fiction est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigated by DGGI, Chennai Zonal Unit, Chennai. As per Section 98 (2) of the Act, the Advance Ruling Authority shall not admit the application where question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provision of the Act. 8.2 Therefore, before proceeding to decide the questions on merits, it becomes imperative that the question of admissibility of the application needs to be decided in view of the investigation initiated by DGGI. on the questions raised in the advance ruling application, which was communicated through the letter received from DGGI, Chennai Zonal Unit dated 28.07.2022. 8.3 For ease of reference, the relevant provisions of Section 98 (2) of the CGST Act, 2017, is reproduced below : "(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 procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said notice shall be deemed to be concluded 74 (8) All proceedings Determination of tax - by reason of fraud - "all proceedings in respect of the said notice shall be deemed to be concluded 75 (10) Adjudication proceedings General provisions - Determination of tax - "The adjudication proceedings shall be deemed to be concluded" 78 Recovery proceedings Initiation of Recovery proceedings 122 (1) (xvii) Any proceedings Penalty for certain offences - "furnishes false information or documents during any proceedings under this Act" 127 Any proceedings Power to impose penalty in certain cases - "the same is not covered under any proceedings under sections 62/ 63/64/73/74/ 129/130". 130 (7) Any other proceedings Confiscation of goods or conveyances - "after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act" 160 (1) Other proceedings Assessment proceedings not to be invalid on certain grounds - "No assessment, re-assessment, adjudication, review, revision, appeal, rectification, notice, summons or other proceedings" 160 (2) Ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74." 8.6.3 Section 127 of the CGST Act, 2017, that talks about Power to impose penalty in certain cases', runs as follows "Where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under section 62 or section 63 or section 64 or section 73 or section 74 or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person."- In this regard, it may be seen that the proceedings referred to under various sections, relate to the following aspects, viz., Section 62 - Assessment of non-filers or returns Section 63 - Assessment of unregistered persons Section 64 - Summary assessment in certain special cases Section 73 - Determination of tax not paid or short paid or erroneously refunded or input credit wrongly availed or utilized for any reason other than fraud or any wilful-misstatement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of show cause notice alone, and that same also denotes proceedings prior to the issue of show cause notice, or proceedings which may not culminate in the issue of any show cause notice at all. Accordingly, the nation of the applicant that the process relating to commencement of inquiry/investigation under summon procedure do not get covered within the category of the term 'proceedings', under the CGST Act, 2017, is misconceived and misplaced, for the reason that apart from such 'judicial proceedings', even the other proceedings relating to assessment, audit, detention/ seizure/ release of goods and conveyance which may or may not entail any issue of show cause notice, are also treated as 'proceedings' under the CGST Act, 2017, as discussed in detail above. Further, the term 'proceeding, is a very comprehensive and general term as used in the CGST Act, 2017, which denotes a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which a judicial action is invoked. Investigation is activated When there is enough predication to show that there is an alleged tax evasion and the essence of investigation is to carry out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he word "proceedings" in Section 6(2)(b) of the U.P.G.S.T. Act / C.G.S.T. Act. It was further held therein as follows :- "The words "any proceeding" on the same "subject-matter" used in Section 6 (2) (b) of the Act, which is subject to conditions specified in the notification issued under sub-Section (1); means any proceeding on the same cause of action and for the same dispute involving some adjudication Proceedings which may include assessment proceedings, proceedings for penalties etc., proceedings for demands and recovery under Section 73 and 74 etc". 8.9 On the other hand however, we notice that the Hon'ble High Court of Andhra Pradesh in its Order dated 23.11.2022 in W.P. No. 5571/2021 in the case of Master Minds Vs Appellate Authority for Advance Ruling (2022) 1 288 (A.P.)/2023 (70) G.S.T.L. 45 (AP.) , has held that Application for advance ruling is not admissible when proceedings in relation to same issue had commenced prior to filing of such application and had ruled that the rulings of both AAR and AAAR were liable to be set aside. Apart from discussing the legalities involved, the Hon'ble High Court has also discussed the following cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are therefore of the opinion that an advance ruling is not required to be pronounced once an investigation is initiated against the applicant under the provisions of the CGST Act, or the GST Act of the respective State or Union Territory, involving the same issue on which the query for advance ruling has been raised. We are also of the opinion that pronouncing a ruling on the same issue in respect of which a show cause notice has been issued, may vitiate the adjudication proceedings involving the said notice. At this juncture, it becomes imperative to analyse as to whether the query raised in the application for advance ruling is the same on which the investigation was initiated, and whether the investigation proceedings precedes the application for advance ruling. Accordingly, in the instant case, it is seen that a statement dated 18.04.2022 has been recorded from Dr. S. Ani Grace Kalaimathi, Registrar of Tamil Nadu Nurses and Midwives Council, in response to a summon dated 12.04.2022 issued by the Senior Intelligence Officer, DGGI, Chennai Zonal Unit wherein vide her answer to Question No. 3 of the said statement, she has explained about the details of charges/fees collected b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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