Advance rulings bind applicant; High Court judicial review limited to process, not merits; equality mandates consistent classification for similar tobacco products.

The appellant herein is engaged in tobacco business. The sequence of activities undertaken by the appellant have been described in Paragraph 7 of the affidavit filed in support of the writ petition as follows :

• Raw dried tobacco leaves are purchased from wholesale dealers/growers.

• Stems and dust particles are removed.

• Then the leaves are cured using jaggery-water for the purpose preventing the leaves from moulding or further decaying, which is called as liquoring.

• Thereafter, the leaves are cut into small pieces in a cutting machine.

• Then the cut leaves are packed in pouches/pottalams.

• The pouches are then supplied for sale under the brand name Kulavi's Kavi cut tobacco.

2.The case of the petitioner was that the product made by him would fall under CETH 2401 20 90. The case of the department was that the appellant's product is classifiable only under CETH 2403 99 10. Since the assessing authority did not agree with him, he moved the advance ruling authority which held that the product in question would get classified as “manufactured chewing tobacco” falling under HSN 24 03. Questioning the same, the appellant herein moved the Tamil Nadu State Appellate Authority for Advance Ruling. The said authority vide order dated 29.09.2020 declined to interfere with the order of the Advance Ruling Authority. Challenging the same, the appellant filed WP(MD)No.204 of 2021. This writ petition was taken up along with other writ petitions and by a common order dated 24.10.2024, it was dismissed. Assailing the same, this writ appeal has been filed.

3.Heard the learned Senior Counsel for the appellant.

4.The learned standing counsel is right in his submission that when once advance ruling was sought and obtained, the assessee is bound by the same and that the scope for judicial review is highly limited.

5.An assessee under the GST laws is entitled to seek advance ruling from the Authority for Advance Ruling and if aggrieved by its decision, move the Appellate Authority for Advance Ruling. The provisions relating to this are set out in Chapter XVII of the CGST Act, 2017 . Section 95 (a) of the Act defines “advance ruling” in the following terms :

“advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100,in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant”

Advance ruling may be sought in respect of the following questions :

“(a) classification of any goods or services or both;

(b) applicability of a notification issued under the provisions of this Act;

(c) determination of time and value of supply of goods or services or both;

(d) admissibility of input tax credit of tax paid or deemed to have been paid;

(e) determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.”

As per Section 103 (1) of the Act, the advance ruling pronounced by the Authority or the Appellate Authority shall be binding only on the applicant and the concerned officer or the jurisdictional officer.

6.Question may arise if the applicant, though declared to be statutorily bound by the advance ruling, can challenge it. The answer is in the affirmative. It has been held that an advance ruling can be assailed by filing a petition under Article 226/227 of the Constitution of India before the juris