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2025 (2) TMI 1088 - AAAR - GSTMaintainability of Advance ruling application - whether the issuance of a summons under Section 70 of the CGST Act constitutes a proceeding under the first proviso to Section 98(2) of the CGST Act? - HELD THAT - It becomes imperative to analyse as to whether the query raised in the application for advance ruling is the same on which the investigation was initiated and whether the investigation proceedings precedes the application for advance ruling. Accordingly it is seen that while the application for advance ruling in the instant case was received on 28.06.2022 the first summon issued by the Senior Intelligence Officer DGGI Chennai Zonal Unit is dated 12.04.2022 based on which a statement has been recorded from Dr. S. Ani Grace Kalaimathi Registrar of Tamil Nadu Nurses and Midwives Council on 18.04.2022 wherein the details of charges/fees collected by Tamil Nadu Nurses and Midwives Council for the period from 01.07.2017 to 31.03.2022 through their letter in Ref. No.1538/NC/2022 dated 18.04.2022 is seen to have been communicated. Through another statement dated 14.06.2022 the legalities relating to taxability in the instant issue is seen to have been discussed. Apart from the same perusal of the Incident Report No. 89/2022 dated 24.06.2022 issued by the DGGI Chennai Zonal Unit clearly brings out the fact that the issue relating to non-payment of taxes under GST on the charges/fees collected by the appellant has already been taken up for investigation. An advance ruling is not required to be pronounced once an investigation is initiated against the appellant under the provisions of the CGST Act or the GST Act of the respective State or Union Territory involving the same issue on which the query for advance ruling has been raised and accordingly the application for advance ruling dated 28.06.2022 by the appellant is liable for rejection under the first proviso to Section 98 (2) of the CGST / TNGST Acts 2017. Conclusion - The rejection of the advance ruling application upheld on the basis that the issue was already subject to an ongoing investigation which constituted a proceeding under the CGST Act. Appeal dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal question considered in this judgment is whether the issuance of a summons under Section 70 of the CGST Act constitutes a "proceeding" under the first proviso to Section 98(2) of the CGST Act, thereby barring the admission of an application for advance ruling on the same issue. 2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The relevant legal framework involves the interpretation of Section 98(2) of the CGST Act, which restricts the admission of an application for advance ruling if the question raised is already pending or decided in any proceedings under the Act. The term "proceedings" is not explicitly defined in the CGST Act, leading to differing interpretations. Court's interpretation and reasoning: The Appellate Authority for Advance Ruling (AAAR) analyzed the term "proceedings" as used in various sections of the CGST Act. It noted that the term is used in different contexts, such as "judicial proceedings," "recovery proceedings," and "assessment proceedings," among others. The AAAR concluded that "proceedings" encompass scrutiny, inquiry, investigation, and other actions that precede the issuance of a show cause notice. Key evidence and findings: The AAAR found that an investigation had already been initiated by the Directorate General of GST Intelligence (DGGI) against the appellant before the application for advance ruling was filed. This investigation involved the same issue of taxability of fees collected by the appellant, which was the subject of the advance ruling application. Application of law to facts: The AAAR applied the first proviso to Section 98(2) of the CGST Act, determining that the ongoing investigation constituted a "proceeding" under the Act. As such, the application for advance ruling was barred from admission because the issue was already pending in a proceeding. Treatment of competing arguments: The appellant argued that a summons under Section 70 does not constitute a "proceeding" and relied on various judicial decisions to support this view. However, the AAAR found these arguments unpersuasive, noting that the term "proceeding" in the context of the CGST Act is broader and includes investigations initiated by the issuance of summonses. Conclusions: The AAAR concluded that the ongoing investigation by the DGGI constituted a "proceeding" under the CGST Act, thereby barring the admission of the advance ruling application. Consequently, the application was rejected under the first proviso to Section 98(2) of the CGST Act. 3. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The AAAR upheld the ruling of the AAR, stating, "We are therefore of the opinion that an advance ruling is not required to be pronounced once an investigation is initiated against the appellant under the provisions of the CGST Act, or the GST Act of the respective State or Union Territory, involving the same issue on which the query for advance ruling has been raised." Core principles established: The judgment establishes that the term "proceedings" under the CGST Act includes investigations initiated by the issuance of summonses. This interpretation aligns with the broader context of the Act, where "proceedings" encompass various actions that may precede formal adjudication or issuance of a show cause notice. Final determinations on each issue: The AAAR upheld the rejection of the advance ruling application on the basis that the issue was already subject to an ongoing investigation, which constituted a "proceeding" under the CGST Act. The appeal was dismissed, and the ruling of the AAR was affirmed.
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