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2024 Supreme(Raj) 732
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
AVNEESH JHINGAN, ASHUTOSH KUMAR, JJ.
M/s Power Grid Corporation Of India Ltd. – Appellant
Versus
State Of Rajasthan – Respondent
D.B. Civil Writ Petition No. 11370 of 2021
Decided on : 18-07-2024
Advocate Appeared:
For the Appellant : Mr. Narendra Singhvi with Ms. Priyamvada Joshi
For the Respondent: Mr. Kinshuk Jain with Mr. Saurabh Jain, Mr. Jai Lodha
A recipient liable for reverse charge under the CGST Act is entitled to seek an advance ruling, contrary to the AAR's interpretation.
Headnote:
Advance Ruling - Goods and Services Tax - CGST Act Sections 95, 97, 98 - The court interpreted the definitions of 'advance ruling' and 'applicant' under the CGST Act, concluding that a recipient liable for reverse charge can seek an advance ruling, thus setting aside the AAR's order.
Fact of the Case:
The petitioner, registered under the Goods and Services Tax Act, sought an advance ruling on the tax exemption for transportation of goods. The AAR ruled the application was not maintainable as the petitioner was not the supplier.
Finding of the Court:
The court found that the AAR's interpretation of the advance ruling provisions was flawed, as the petitioner, being liable to pay tax on reverse charge, qualifies as an applicant under the CGST Act.
Issues: Whether a recipient of goods or services liable to pay tax on reverse charge can seek an advance ruling.
Ratio Decidendi: The definitions in the CGST Act allow for a broader interpretation of who can apply for an advance ruling, including those liable for reverse charge.
Result: The impugned order was set aside and the matter remitted back to AAR for fresh consideration.
JUDGMENT :
Avneesh Jhingan, J
1. This petition is filed seeking quashing of order dated 31.05.2021 passed by Rajasthan Authority for Advance Ruling (for brevity ‘AAR’) under Goods & Services Tax Act, 2017.
2. Brief facts are that the petitioner is registered under the Goods and Services Tax Act, 2017 and is engaged in transmission of electricity. During the course of business, petitioner engages contractors. In course of execution of contract supply of material ex-work is made. The contractor transports goods and raises invoice for transportation. The petitioner filed an application for an advance ruling on the issue as to whether in facts of the case, transportation of goods is exempt under Serial No.18 of Notification No.12/2007 Central Tax (Rate) (for short ‘Notification’). The AAR held application under Section 97 of the Central Goods and Service Tax Act, 2017 (for short ‘CGST Act’) is not maintainable, as petitioner was not the supplier. Hence, the present petition.
3. Learned counsel for the petitioner submits, in case of non applicability of the exemption notification the petitioner shall be liable to pay tax on reverse charge basis, the services being in notified category. The contention is that in Sections 95 and 97 there is no restriction that the application for advance ruling can be made only by the supplier.
4. Learned counsel for the respondent objects that the impugned order is appealable. Per contra the advance ruling can be sought by supplier or proposed supplier. The argument is that the petitioner is not covered under definition of supplier.
5. As per learned counsel for the petitioner the appeal is provided against order passed under Section 98(4) and not against order under Section 98(2) of the CGST Act.
6. The issue involved is:-
“Whether recipient of good or services or both liable to pay tax on reverse charge basis can seek Advance Ruling?”
7. Chapter XVII of the CGST Act deals with advance ruling. Definitions are in section 95 and it starts with “unless context otherwise requires”.
Under Clause (a) ‘advance ruling’ is a decision of the Authority or the Appellate Authority or the National Appellate Authority at instance of the applicant, on matters or on the issues specified in Sub-Section (2) of Section 97 or Sub-Section (1) of Section 100 or of Section 101C and in relation to supply of goods or services or both, being undertaken or proposed to be undertaken by the applicant.
Clause (b) defines Appellate Authority for advance ruling as referred to in Section 99.
Under Clause(c) ‘Applicant’ is defined as any person registered or desirous of obtaining registration under the Act.
Application under Clause (d) means an application made to the Authority under Section 97(1).
8. Section 97(1) provides that application for advance ruling can be filed by any applicant desirous of getting an advance ruling. An application stating question to be asked is to be made in the prescribed manner and accompanied by fee prescribed.
Section 97(2) prescribes the issues for which the question for advance ruling can be sought. Clause (b) of Sub-Section 2 “applicability of notification issued under the provisions of this Act” would be relevant for the present case.
9. Section 98 provides the procedure to be adopted on receipt of an application for advance ruling. Under sub section 2, the Authority after examining the application, record and providing opportunity of hearing to the applicant and the officer concerned, has to pass an order either admitting or rejecting the application. Proviso to Sub-Section 2 provides that the application for advance ruling shall not be admitted on the question raised, pending or decided in the case of the applicant under any of the provisions of the CGST Act. As per second proviso the application shall not be rejected without granting an opportunity of hearing. Third proviso stipulates for specifying the reasons in the order for rejecting the application. Sub-Section 3 obligates supplying of the order passed
