2024 (10) TMI 1378 - AAAR - GST

Maintainability of appeal - Time limit for passing order u/s 101 of CGST Act, 2017 - appeal barred by limitation or not - failure to follow due procedure - Appellant No. 1 is Proper Authority to file an appeal - Appellant No. 2 is revisiting the stand already taken - Valuation of GTA service - inclusion of value of diesel provided by the customer (service recipient) to the trucks in the freight charged by the Applicant - Whether time limit for passing order u/s 101 of CGST Act, 2017 stands expired? - HELD THAT - 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 word shall in Section 101 of the CGST Act has to be interpreted in an advisory way. Any other interpretation 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. Whether the appeal is barred by limitation? - HELD THAT - The impugned Order was communicated on 15.09.2022 to the Appellant No. 2 and an appeal was filed by them on 14.10.2022 that was within statutory period of 30 days, accordingly, the appeal was filed within time prescribed, hence not time barred - the appeals filed by the Appellants are well within the period of limitation are not barred by it as provided under proviso to Section 100 (2) or Section 100 (2) of the CGST Act, 2017 - the preliminary objection to this effect raised by the Respondent is liable for rejection and is hereby rejected. Whether due procedure not followed? - HELD THAT - In view of the express provisions of Rule 107A of the CGST Rules, 2017 manual filing of appeals by the Appellants is in consonance with the legal provisions and, therefore, the preliminary objection raised by the Respondent on this count is liable to be rejected and the same is hereby rejected. Whether Appellant No. 1 is Proper Authority to file an appeal or not? - HELD THAT - The term 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. Whether Appellant No. 2 is revisiting the stand already taken? - HELD THAT - The Appellant has revisited the stand taken before the AAR, we note that the Joint Commissioner, State Tax, Suratgarh vide letter dated 08.05.2024 furnished additional submissions in continuation of those made during the Personal Hearing held on 07.05.2024. It is noted that 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 the instant case, it is observed 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, Appellant No. 2 has rightfully filed the appeal, rendering the issue of revisiting the previously taken stand as incorrect improper. 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. The preliminary objections raised by the Respondent against the appeals filed by the department against the Advance Ruling dated 16.06.2022 are not sustainable and the appeals are maintainable and deserve to be decided on merits.

Summary

Issues Involved:

1. Whether the value of diesel provided free of cost by the customer is includable in the value of the Goods Transport Agency (GTA) service for GST purposes.
2. Timeliness and maintainability of the appeals filed by the appellants.
3. Whether the appeals were filed following the prescribed procedure.
4. Authority of the Principal Commissioner, CGST Jodhpur to file an appeal.
5. Revisiting the stance taken before the Authority of Advance Ruling (AAR).

Issue-wise Detailed Analysis:

1. Inclusion of Diesel Value in GTA Service:

The core issue revolves around whether the value of diesel provided free of cost by the customer should be included in the taxable value of the GTA service. The AAR ruled that the value of diesel provided free of cost by the service recipient is not includable in the value of the GTA service. The appellants argued that as per Section 15 of the CGST Act, 2017, the transaction value should include any amount that the supplier is liable to pay, which has been incurred by the recipient. They contended that diesel is an essential component for providing GTA services, and its cost should be considered as additional consideration under Section 2(31) of the CGST Act, 2017. The appellants also argued that the AAR misinterpreted the provisions regarding the liability to pay for inward supplies like diesel.

2. Timeliness and Maintainability of Appeals:

The respondent challenged the maintainability of the appeals, claiming they were time-barred. The appeals were filed on 12.08.2022 and 14.10.2022, while the AAR order was communicated on 23.06.2022 and 28.06.2022. The appellants argued that they received the order on 11.08.2022 and 15.09.2022, respectively, and sought condonation of delay. The authority examined the dates and concluded that the appeals were filed within the extended period allowed under Section 100(2) of the CGST Act, 2017, thus rejecting the respondent's objection on this ground.

3. Procedure for Filing Appeals:

The respondent argued that the appeals were not filed on the common portal as required by Rule 106 of the CGST Rules, 2017. However, the authority noted that Rule 107A allows for manual filing and processing, thus permitting the appeals to be filed in hard copy. The objection regarding the procedure was therefore rejected.

4. Authority to File Appeal:

The respondent contended that the Principal Commissioner, CGST Jodhpur, was not the proper authority to file the appeal. The authority clarified that the terms 'concerned officer' and 'jurisdictional officer' under Section 100 of the CGST Act, 2017, refer to different officers from the Central and State GST authorities, both of whom are entitled to file an appeal. Thus, the appeal by the Principal Commissioner was deemed valid.

5. Revisiting the Stance Taken Before AAR:

The respondent argued that the appellant could not revisit the stance taken before the AAR, invoking the principle of estoppel. However, the authority held that there is no estoppel against the State or statute. The Joint Commissioner, State Tax, Suratgarh, clarified that the initial stance was taken without proper approval from higher authorities, and the appeal was filed after reconsideration. Therefore, the objection was rejected, and the appeal was considered maintainable.

Conclusion:

The authority concluded that the preliminary objections raised by the respondent were not sustainable. The appeals were deemed maintainable and were to be decided on merits. The respondent was requested to make submissions on the merits and appear for a personal hearing.