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Hon'ble Judges:

VIVEK RUSIA
AMAR NATH
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COUNCIL
Ajay Bagadia
Tarang Chelawat
COUNCIL
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Can taxpayer approach for Advance Ruling after initiation of search or scrutiny in GST? - High Court clarifies...

The Petitioner is a work contractor and registered under GST in various states.

Premises of the petitioner was searched by the authorities of the Director-General of GST Intelligence and found evasion of GST. Vide notice dated 21.05.2020, the petitioner was called upon to discharge the remaining GST liability in Form DRC-03 at the applicable rate of 18% on works contract services supplied as a sub-contractor to the main contractor.

After receipt of the aforesaid notice, the petitioner has approached the Authority for advance ruling contending that in view of the notification No.11/2017 CT(R) as amended on 22.08.2017, the rate of taxes applicable to the sub-contractor shall be 12% instead of 18%.

Learned Authority has obtained the comments from the Department, accorded the personal hearing to the parties, declined to grant advance ruling by virtue of First Proviso of section 98(2) of CGST Act, 2017.

Being aggrieved by the aforesaid order, the petitioner has approached Appellate Authority by way of filing an appeal under Section 101 of the CGST Act. The Appellate Authority has dismissed the appeal by upholding the order passed by Advance Ruling Authority. Hence, present writ petition before this Court.

Arguments by Petitioner:

Learned Senior Counsel appearing on behalf of the petitioner submits that the learned Authority, as well as Appellate Authority, have failed to correctly interpretate the language 98(2) of the CGST Act. The said only proviso bars the advance ruling if the question raised is pending or decided in any proceedings under any provision of the Act. In the present case no such proceedings are pending against the petitioner, therefore, Authority ought to have decided the issue raised by the petitioner regarding the applicability of the rate of tax, hence, the matter is liable to be remanded back to the authorities for adjudication on merit.

Held by High Court:

Section 95(a) defines the word '' Advance Ruling'' which is reproduced below: 95(a) '' advance ruling'' means a decision .......
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Author:

TaxReply


Jun 23, 2022


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