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TMI Blog2024 (10) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... present appeal has been filed under Section 100 of the Central Goods & Service Tax Act, 2017 (hereinafter also referred to as 'the CGST Act') read with Section 100 of the Rajasthan Goods &Services Tax Act, 2017 (hereinafter also referred to as 'the RGST Act') by the Appellants against AAR, Rajasthan Ruling Order No. RAJ/AAR/2022-23/08 dated 16.06.2022. The Principal Commissioner, CGST Commissionerate, Jodhpur filed an appeal on 12.08.2022 and also submitted a request to condone the delay which is very meagre. As per them, the order of AAR was received by them on 11.08.2022. Subsequently, the Deputy Commissioner, State Tax Department, Circle, Ward - Suratgarh also filed an appeal before this authority on 14.10.2022 as admittedly the AAR Order dated 16.06.2022 was received by them only on 15.09.2022. They also requested for condonation of delay of 30 days as per proviso to sub-section (2) of Section 100 of CGST Act, 2017. BRIEF FACTS OF THE CASE 1. Shri Sunil Giri, Proprietor of M/s Giri Transport Company (hereinafter referred to as 'Respondent') having GSTIN - 08CRBPG5309NIZM, a Goods Transport Agency (GTA) was about to enter into contract with their customer for providing servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n being aggrieved with the Order dated 16.06.2022 passed by the AAR, Rajasthan, the Principal Commissioner, CGST Commissionerate Jodhpur filed an appeal before this authority on 12.08.2022 stating therein that due to late communication of AAR Order dated 16.06.2022 to them on 11.08.2022, they were unable to file the appeal against the above Order within a period of thirty days from the date of communication of the Order. They have also stated that the delay in filing of appeal is very meagre and should be condoned in view of the proviso to Section 100 (2) of the CGST Act, 2017. Subsequently, the Deputy Commissioner, State Tax Department, Suratgarh are also in appeal before us against the impugned AAR Order on 14.10.2022 showing therein date of communication of AAR Order as 15.09.2022. They also requested to extend the due date of filing of appeal by 30 days as per proviso to the Section 100 (2) of the CGST Act, 2017. Grounds of appeal for both the appeals are the same, which are reproduced as below:- 8. The appeal has been filed on the following Grounds by both the Appellants: 8.1 The Appellants have contended that as per Section 15 (1) of CGST Act, 2017, the value of a supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both"; Authority of Advance Ruling has mis-interpreted the phrase "liable to pay in relation to such supply". In case of GTA, fuel is main inward supply to execute outward supply. Irrespective of the fact that the cost is being borne by supplier or recipient, the onus of getting inward supply always lies with the supplier. 8.6 The Appellants averred that in normal course, the fuel expenses were to be borne by the Respondent but they made an agreement in which recipient would supply fuel for free. This does not spare the supplier from the liability of payment of inward supply i.e. diesel in the light of statutory provision relating to determination of value of taxable supply contained under GST Act. 8. 7 The Appellants contended that Section 15 (4) of CGST Act 2017 stipulates that "Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed." Accordingly, Rule 27 to 31 of CGST Rules, 2017 prescribed the valuation in CGST in such circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents which had been pronounced in context of service tax and therefore, are not applicable in context of GST law as: (i) In the case of Heligo Charters Pvt. Ltd, the dispute was whether the taxpayer is providing 'Business Support Service' or 'Supply of tangible goods for use without transfer of right of possession and effective control' hence has no bearing to the present case. (ii) In the case of M/s R.K. Transport Company v. CCE [2020 (11) TMI 34] CESTAT New Delhi, case laws pertain to the erstwhile service tax regime, i.e. prior to April, 2012 and not applicable in this case. (iii) The case law quoted on the basis of erstwhile service tax law is not applicable in the instant case as the provision in Section 15 (2) (b) of the CGST Act, 2017 are different from the provisions governing determination of value of taxable service contained under Section 67 of the Finance Act, 1994. According to this Section, the value of services shall be limited to the gross amount charged by the service provider for the service provided or to be provided. Section 15 (2) (b) of the CGST Act, 2017 however, stipulates that the value of supply shall also include amount that the supplier is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jasthan which is prima facie, contrary to legal provisions has serious implications from view point of determination of value of taxable service as this procedure of intentionally splitting up the GTA service contract is largely used in almost all Cement Manufacturers in the country as well as various other service sectors. 8.15 The Appellants contended that the AAR in their Ruling stated that the issue is also revenue neutral in as much as even if the value of the free of cost diesel was required to be included in the value of GTA service then also the service recipient of the Respondent would be in a position to take input tax credit of the GST charged on such an invoice raised by the Respondent. The AAR findings in the context is beyond the concept of taxation as each and every B2B transaction, service receivers are taking input tax credit of the GST charged on such an invoice raised by the suppliers; and if it should be treated as revenue neutral then there should be no taxation on B2B supply and it will defeat the very purpose of taxation law. Taxation on supply and input tax credit both are separate things and governed by different set of Act/Rules of GST. PERSONAL HEARING ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdictional officer at the time of the ruling by the AAR, furnished comments that contradicted the submissions furnished by them during the personal hearing dated 07.03.2024. 9.3 In response to the Respondent's request, they were intimated vide this office letter dated 19.04.2024 that neither the letters mentioned by them had been received by this office, nor were any preliminary objections filed against the appeal. They were granted the adjournment and the personal hearing was rescheduled to be held on 16.04.2024. 9.4 The Respondent vide letter dated 01.04.2024, received via email on 09.04.2024, expressed their grievance that the documents requested vide their email dated 16.03.2024 were not provided to them. They added that the documents were of utmost importance in order to file exhaustive submissions in respect of the appeals. They also stated that they have submitted preliminary objections regarding both the appeals. In this letter, the Respondent has enclosed the letters dated 29.09.2022 and 27.10.2022 purportedly sent by them earlier. The Respondent further contended in the letter that they had already raised preliminary objections in the following ways: 9.4.1 Thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions already made by them and further relied upon an Order dated 17.10.2023 of the Hon'ble Chhattisgarh High Court (writ petition No. 117/2022) in the case of M/s Shri Jeet Transport v/s UOI and others in a similar issue wherein the diesel cost has been held to be includible in the taxable value. 9.6 The counsels for the Respondent supplied two written submissions dated 07.05.2024 (one each for the Centre and the State). They submitted that they had four preliminary objections for appeal filed by CGST and four for appeal filed by SGST. Three of the objections were common for both the appeals and are reproduced as below: 1. That the time limit for passing order u/s 101 of the CGST Act 2017 stands expired. 2. That the Appeal has been filed without following the procedure as prescribed by law. 3. That the Appeal filed by the Appellant Department is time barred. One objection each was specific to the CGST appeal and for SGST appeal. The two preliminary objections are reproduced as below in that order: 4. That the Appellant (Principal Commissioner, CGST Jodhpur) is not a proper authority to file an Appeal u/s 100 of the CGST Act. 5. That Appellant (Deputy Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inality of the Advance Ruling Order. II. THAT THE APPEALS FILED BY THE APPELLANT DEPARTMENTS ARE TIME BARRED. A. The Respondent submitted that the Appellant No. 1 filed the appeal on 12.08.2022 in respect of impugned order dated 16.06.2022 while Appellant No. 2 filed the appeal on 14.10.2022 B. The Respondent contended that Section 100 (2) provides that the appeal before the Appellate Authority of Advance Ruling has to be filed within a period of 30 days from the date of communication of order to the Appellant. They added that it also provides that the time limit can be further extended to another 30 days on sufficient cause being shown. Sub-section (2) of Section 100 of CGST Act, 2017 provides as follows - 100. Appeal to Appellate Authority. (2) Every appeal under this Section shall be filed within a period of thirty days from the date on which the ruling sought to be appealed against is communicated to the concerned officer, the jurisdictional officer and the applicant: Provided that the Appellate Authority may, if it is satisfied that the Appellants was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017 which reads as under: Rule 106. Form and manner of appeal to the Appellate Authority for Advance Ruling.- (1) An appeal against the Advance Ruling issued under sub-section (6) of Section 98 shall be made by an applicant on the common portal in FORM GST ARA-02 and shall be accompanied by a fee of ten thousand rupees to be deposited in the manner specified in Section 49. (2) An appeal against the Advance Ruling issued under sub-section (6) of Section 98 shall be made by the concerned officer or the jurisdictional officer referred to in Section 100 on the common portal in FORM GST ARA-03 and no fee shall be payable by the said officer for filing the appeal. (3) The appeal referred to in sub-rule (1) or sub-rule (2), the verification contained therein and all the relevant documents accompanying such appeal shall be signed,- (a) in the case of the concerned officer or jurisdictional officer, by an officer authorized in writing by such officer; and (b) in the case of an applicant, in the manner specified in rule 26." C. The Respondent submitted that as per the provisions of Section 100 (3) of the CGST Act, 2017 read with Rule 106 (2) of the CGST Rules, 2017, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such question. (6) The Authority shall pronounce its advance ruling in writing within ninety days from the date of receipt of application. (7) A copy of the advance ruling pronounced by the Authority duly signed by the members and certified in such manner as may be prescribed shall be sent to the applicant, the concerned officer and the jurisdictional officer after such pronouncement. The Respondent contended that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be, filled up with the diesel for the said trip. The said agreement is always for transportation to specific destinations only. The Applicant would be neither required to nor would be liable to pay for the diesel that would be filled in the trucks by the said customer. As far as the Applicant is concerned the Applicant will be required to send the trucks to the customer's destination. The trucks will report to the factory and after loading of goods, diesel calculated on the basis of load and distance, for the transportation of the said consignment to the destination, will be filled in the fuel tank of the truck. 6. On examination of the application, the applicable legal provisions of CGST Act are produced hereunder. Valuation under Section 15 CGST Act does not include the present Transaction Section 15 (1) of CGST Act clearly provides that price actually paid or payable for supply of goods/ services is to be the value of supply. Further, Section 15 (2) (b) only includes the amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient and not included in the price actually paid or payable. Hence this sub-section only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appeal as the time limit for passing the order as per Section 101 of the CGST Act has expired and declare the ruling given by the Authority of Advance Ruling vide order dated 16.06.2022 as final; and or ii. Reject the appeal declaring it to be barred by limitation; and/or iii. Dismiss the appeal being filed without following the procedure prescribed under the law; and iv. If proceeding further in the matter on merits, then a sufficient opportunity to submit reply on merits may please be provided. 13. The Joint Commissioner, State Tax, Suratgarh vide letter dated 08.05.2024 made an additional submission in continuation of those made during the Personal Hearing held on 07.05.2024. During the course of hearing, representative of the respondent has raised a contention that the appellant (Deputy Commissioner, SGST, Circle Suratgarh) cannot revisit the stand taken before the AAR to the effect that GST is not leviable on free of cost (FOC) materials supplied by service recipient to applicant when such goods are in the scope of service recipient as per contractual terms. In this regard, the Joint Commissioner, State Tax, Suratgarh submitted that the stand taken by the Deputy Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made by authorized representatives of the Respondent at the time of personal hearing dated 07.05.2024. We observe that the Authority of Advance Ruling, Rajasthan ('AAR') vide Advance Ruling No. RAJ/AAR/2022-23/08 dated 16th June, 2022 pronounced Ruling that "the value of diesel filled free of cost (FOC) by the service recipient is not includable in the value of the GTA service proposed to be provided by the Applicant (GTA) in the facts and circumstances of the present application subject to conditions as mentioned in draft Transport Service Agreement/ contract incorporated in the body of this decision/ruling." 16. We note that the Principal Commissioner, CGST Commissionerate, Jodhpur and subsequently the Deputy Commissioner, State Tax, Suratgarh have filed appeals against the impugned Ruling of the AAR, Rajasthan. The Respondent was communicated the appeals and comments were sought from them. The Respondent however did not supply any comments and instead requested for 4 weeks time to file preliminary objections against the appeal. 17. In the meantime, the Respondent filed DB CWP No. 14009 of 2022 before Hon'ble Rajasthan High Court, Jodhpur with the request that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the communications dated 29.08.2022, 29.09.2022, 27.10.2022 and 08.03.2024 whereby it was requested to provide certain information/documents which have not been provided and therefore, the present written submission to preliminary objection is subject to information/ documents to be provided to him." 21. We note that the Respondent has sought detailed correspondences by which the captioned appeals, being barred by limitation and lapsed, has been revived including the provisions of law vide which the same can be revived. We note that the Respondent have raised two issues. First, they want copy of the correspondence between AAAR & the Appellants. Second, they have raised a point of law. As regards supplying copies of communication, we note that Advance Ruling mechanism provided under the CGST Act, 2017 does not contain provisions allowing a Respondent to commence an investigation about functioning of the AAAR. However, we note that the relevant information contained in the communications finds place in the instant order. We also propose to decide the underlying issue behind the contention. As regards the provisions of law, there is nothing to be provided to the Respondent. Neverthel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposal of the appeal filed by them. We also note that in law, the meaning of 'shall' cannot always be construed to be as mandatory or something that must be done. It can also be considered to convey the meaning as 'may' based on the context in which it is being used. Thus we need to look into the context and the scheme of law. In the instant case, the intention of the law according to the subsection 2 of the Section 101 of the CGST Act 2017 is to accord a right to the appellant to be heard and to obtain a ruling in respect of the appeal filed within a set time frame. If, the meaning of 'shall' is to be taken in a binding or restrictive manner then upon expiry of 90 days, the order cannot be passed by the Appellate Authority, depriving the appellant of the right of getting the order issued in their appeal. The language of the law states that "order referred to in sub-section (1) shall be passed ..." and not "no order shall be passed after expiry of ninety days ... "id est it is not negatively binding in any manner. Ergo, here in the instant case, the meaning of 'shall' is not to be construed as 'mandatory' but 'directory'. We further infer that the intention of law is not restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic convenience would be subserved or public inconvenience or the general inconvenience that may ensue if it is held mandatory and all other relevant circumstances are required to be taken into consideration in construing whether the provision would be mandatory or directly. If an object to the enactment is defeated by holding the same directory, it should be construed as mandatory whereas if by holding it mandatory serious general inconvenience will be created to innocent persons of general public without much furthering the object of enactment, the same should be construed as directory but all the same, it would not mean that the language used would be ignored altogether. Effect must be given to all the provisions harmoniously to suppress public mischief and to promote public justice." 22.2.3 We also refer to the Hon'ble SC judgment in Mansukhlal Vithaldas Chauhan Vs. State of Gujarat [(1997) 7 SCC 622] where the Hon'ble Court held: Mandamus which is a discretionary remedy under Article 226 of the Constitution is requested to be issued, inter alia, to compel performance of public duties which may be administrative, ministerial or statutory in nature. Statutory duty may be eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding would be invalid....." 29. Words are the skin of the language. The language is the medium of expressing the intention and the object that particular provision or the Act seeks to achieve. Therefore, it is necessary to ascertain the intention. The word `shall' is not always decisive. Regard must be had to the context, subject matter and object of the statutory provision in question in determining whether the same is mandatory or directory. No universal principle of law could be laid in that behalf as to whether a particular provision or enactment shall be considered mandatory or directory. It is the duty of the court to try to get at the real intention of the legislature by carefully analysing the whole scope of the statute or section or a phrase under consideration. The word `shall', though prima facie gives impression of being of mandatory character, it requires to be considered in the light of the intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation shall have the effect of denying the right of appeal to taxpayers & stake holders which is not the scheme/intention of law. It will be interpreted to convey that the AAAR shall endeavour to pass the order in 90 days. Therefore, the argument of expiry of time limit for passing an order is hereby rejected as a preliminary objection as well as an objection to the grounds of appeal. Second objection-Appeal barred by limitation 23. The Respondent has raised another objection with regard to maintainability of the appeals stating that the appeals filed by the Appellant departments are time barred. We observe that the Respondent contended that the AAR order dated 16.06.2022 was communicated to the Appellants by speed post on 23.06.2022/ 28.06.2022 and also uploaded on the portal on 17.06.2022. The Respondent asserted that submission of appeals by the Appellants on 12.08.2022 and 14.10.2022 with the claim that the Order was communicated to them on 11.08.2022 and 15.09.2022 is clearly barred by limitation of time provided under Section 100 of the CGST Act, 2017. 23.1 We have gone through the appeal papers and observe that the first appeal against the Order dated 16.06.2022 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2022 respectively and that the order was also uploaded on the common portal on 17.06.2022 itself. 23.5 In this regard, vide letters dated 31.05.2024, the details of receipt of the impugned Order were enquired from both the Appellants id est the Commissioner, CGST & CX/ST, Jodhpur and the Joint Commissioner, State Tax, Suratgarh. 23.5.1 We note that the Appellant No. I vide their letter dated 12.06.2024 informed that their office had received a letter from the Principal Commissioner, CGST Audit, Jaipur on 11.08.2022 enclosing a copy of the subject order, requesting them to file an appeal against the order within extended period. After taking cognizance of the said letter, the Appellant No. 1 filed an appeal on 12.08.2022 against the impugned order with a request to condone the delay. They further informed that they had received the impugned order itself in their office on 29.06.2022 and filed an appeal against the order on 12.08.2022. The date of filing of appeal was beyond the period of 30 days as prescribed in Section 100 (2) of CGST Act 2017. However, the Appellant No. 1 had also submitted a request to condone the delay in filing of appeal. We found that impugned Order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on portal in FORM GST ARA-03. 24.1 In this regard we note that the facility of filing appeals online on the common portal is a measure of trade facilitation and ease of doing business. It not only saves time and money of the appellant and obviates the need for physical visit to the offices but also helps automatic digitization of case records besides positive impact on environment. However, online filing of appeals is a measure of facilitation only and the same cannot be used as a tool to deny an Appellant the right to appeal simply because the appeal has been filed in hard copy. 24.2 Be that as it may, we note that though the rules provide for online filing of appeal but the same do not prohibit filing of appeal in physical form. In this regard, Rule 107A of the CGST Rules, 2017 provides as follows: "Manual filing and processing. Notwithstanding anything contained in this Chapter, in respect of any process or procedure prescribed herein, any reference to electronic filing of an application, intimation, reply, declaration, statement or electronic issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include manual filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the applicant, the concerned officer and the jurisdictional officer after such pronouncement." 25.4 From the above provisions also we note that the terms 'concerned officer' and 'jurisdictional officer' have been employed to denote two different authorities and the sub-section (7) of Section 98 ibid does not indicate that 'concerned officer' and 'jurisdictional officer' can be one and the same officer. 25.5 From the above provisions of law, we note that 'concerned officer' and 'jurisdictional officer' are two different officers distinct from each other. Further, since there are only two officers, one from the Central GST and the other from the State GST, exercising territorial jurisdiction over a taxable person it logically follows that both are entitled to file an appeal against the Advance Ruling pronounced in respect of that taxable person. Thus, the appeal filed by the Central GST authority is well within the scope of Section 100 (1) of the CGST Act, 2017. Fifth objection-Appellant No. 2 revisiting the stand already taken 26. The Respondent has argued that the order passed by the AAR is an 'Consensus ad Ordinem' and the Appellant No. 2 (Deputy Commissioner State Tax, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional Officer" i.e. the State GST authority has raised serious objections as regards the applicability of the CBIC's circular and of various judgments referred to by the Advance Ruling Authority and contested the Advance Ruling mainly on the following grounds:- (i) In the instant case, the price cannot be termed as sole consideration for services as Diesel is being supplied free of cost by the recipient, hence, transaction value as per agreement cannot be considered as sole consideration and condition as per Section 15 (1) of CGST Act, 2017 is not fulfilled. (ii) The provision of GTA services envisages providing a vehicle in running condition with requisite fuel being a mandatory component, without which the service of GTA cannot be performed. Thus, the supply of GTA service would essentially involve the supplier to bear the cost of fuel i.e. diesel which cannot be isolated through a contractual arrangement. And even if the diesel is provided by the service recipient Free of Cost, the value of the same will have to be considered as additional consideration flowing from the recipient to the supplier. Diesel provided on Free of Cost basis under terms of the contract is pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment makes such promise, their promise would operate as estoppel only if they are competent to make good such promise [U.O.I. v. Godfrey Phillips - 1985 (22) E.L.T. 306 (S.C.) = 1985 (4) SCC 369]. A letter from the State Trading Corporation is not an estoppel on Customs. Jain Exports (P) Ltd. v. U.O.I.- 1992 (61) E.L.T. 173 (S.C.) = 1988 (3) SCC 579] 26.7 In the instant case, we observe that Appellant No. 2 filed the appeal proceedings after consideration of the matter by higher authority in the State Tax department, whereas their initial stance was at their own accord sans proper approval from the higher authority. Consequently, we find that an appeal cannot be deemed non-maintainable merely because it contradicts the earlier stance taken by the appellant, under mistaken belief about the jurisdiction and authority. Thus, we hold that Appellant No. 2 has rightfully filed the appeal, rendering the issue of revisiting the previously taken stand as incorrect & improper. 26.8 We therefore hold that the principle of estoppel cannot be made applicable in the instant case. The preliminary objection on this count is, therefore, liable to be rejected and the same is hereby rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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