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2022 Supreme(Telangana) 366
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Ujjal Bhuyan, C.V. Bhaskar Reddy, JJ.
M/s. Srico Projects Pvt. Ltd. - Petitioner
Versus
Telangana State Authority and another - Respondents
W.P.No.26145 of 2022
Decided On : 17-08-2022
Advocate Appeared:
For the Petitioner: Dr. S.R.R. Viswanath
For the Respondent: Ms. Sapna Reddy
Point of Law : Inquiry or investigation would not come within the ambit of the word “proceedings”.
Headnote:
Constitution of India,1950 - Article 226 - Central Goods and Services Tax Act, 2017 - Section 2,70,95 to 106 - CompaniesAct,1956.–power Of High Courts to issue Certain Writs – Seeks quashing – Power to Summon Persons to give evidence and Produce documents – Procedure on receipt of application –Appeal to Appellate Authority – Order Of Nation Appellate Authority – Authority shall not admit an application for advance ruling 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 the CGST Act. (Para 11)
Findings of Court :
Respondent No.1 i.e., Telangana State Authority for Advance Ruling was not justified in rejecting the application of the petitioner vide the order. Accordingly the said order is set aside and quashed. Respondent No.1 is directed to take on board the application filed by the petitioner and pass an appropriate order thereon under sub-section (4) of Section 98 of the CGST Act after giving due opportunity of hearing to the petitioner.
Result : Petition allowed.
ORDER :
Ujjal Bhuyan, J.
Heard Dr. S.R.R. Viswanath, learned counsel for the petitioner and Ms. Sapna Reddy, learned counsel appearing for respondent No.2.
2. By filing this writ petition, under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 03.06.2022 passed by respondent No.1 i.e., Telangana State Authority for Advance Ruling (briefly, ‘the Authority’ hereinafter), further seeking a direction to respondent No.1 to consider its application for advance ruling under Section 98 of the Central Goods and Services Tax Act, 2017 (briefly, ‘the CGST Act’ hereinafter) and thereafter pass appropriate order.
3. Petitioner is a private limited company incorporated under the Companies Act, 1956. It is engaged in the business of undertaking works contract mostly with the Central and State Governments. Petitioner is a registered supplier under the CGST Act and related Acts. According to the petitioner, the rate of GST for works contract undertaken with the Central Government Employees Welfare Housing Organisation would be 18% (CGST 9% + SGST 9%). According to Central Government Employees Welfare Housing Organisation, GST would be 12% (CGST 6% + SGST 6%). Accordingly, Central Government Employees Welfare Housing Organisation paid GST to the extent of 12% and after deducting the same made payment to the petitioner. This caused loss to the petitioner besides being susceptible to the charge of underpaying GST. In these circumstances, petitioner submitted an application for advance ruling on 11.05.2019 on the question as to what would be the rate of tax on works contract services rendered by it to the Central Government Employees Welfare Housing Organisation. However, there was inordinate delay in providing advance ruling. In the meanwhile, respondent No.2 issued letter dated 15.02.2021 to the petitioner alleging short payment of GST i.e., 12% instead of 18%. This was followed by issuing of summons to the Managing Director of the petitioner under Section 70 of the CGST Act directing his appearance before respondent No.2 on 05.01.2022 and issuance of subsequent summons by respondent No.2.
4. After long three years, the Authority issued notice to the petitioner on 25.04.2022 scheduling personal hearing on 27.04.2022. The authorised representative of the petitioner appeared for such personal hearing and requested the Authority to give a ruling on the question raised by it in the application dated 11.05.2019. By the impugned order dated 03.06.2022, the application for advance ruling was rejected. Aggrieved thereby, present writ petition has been filed.
5. On 20.06.2022, this Court had issued notice and had called upon the respondents to file counter affidavit.
6. Ms. Sapna Reddy, learned counsel appearing for respondent No.2 submits that counter affidavit has been filed, a copy of which has been placed before us.
7. From a perusal of the order dated 03.06.2022, we find that the Telangana State Authority for Advance Ruling (already referred to as ‘the Authority’ hereinbefore) noted that Directorate General of GST Intelligence (DGGI), Hyderabad Zonal Division, had initiated enquiry into the business activities of the petitioner and in this connection had issued notice to the petitioner on 15.12.2021. Holding that case of the petitioner falls under the first proviso to Section 98(2) of the CGST Act, the Authority rejected the application for advance ruling.
8. In the counter affidavit, stand taken by respondent No.2 is that DGGI started investigation into the business activities of the petitioner and petitioner knew about such investigation as would be evident from its letter dated 15.12.2021 addressed to DGGI, but this fact was not disclosed. On this basis, decision of the Authority has been justified.
9. Submissions made have been considered.
10. Chapter XVII of the CGST Act deals with advance ruling. Sections 95 to 106 form part of Chapter XVII. Section 95(a) defines “advance ruling” to mean a decision provided by the Author
