REJECTION OF APPLICATION FOR ADVANCE RULING

[Mr. M. GOVINDARAJAN]

Rejection

• On receipt of an application, the Authority for Advance Ruling shall forward a copy of the application to the concerned officer and, if necessary, call upon him to furnish the relevant records.
• Where any records have been called for by the Authority for Advance Ruling in any case, such records shall, as soon as possible, be returned to the said concerned officer.
• The Authority for Advance Ruling may, after examining the application and the records called for and after hearing the applicant or his authorized representative and the concerned officer or his authorized representative, by order, either admit or reject the application.
• If the application is admitted the Authority for Advance Ruling will proceed to further to hear the applicant and the Revenue.
• The Authority for Advance Ruling may reject the application after giving an opportunity to the applicant o f being heard.
• The Authority for Advance Ruling while rejecting the application, he should record the reasons for such rejection.
• A copy of the order for admission or rejection shall be sent to the applicant and the concerned officer.

Grounds for rejection

The application for advance ruling may be rejected by the Authority for Advance Ruling on the following grounds-

• 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 this Act;
• absence of jurisdiction to entertain the application;
• beyond the scope of advance ruling;
• other reasons.

Rejection of application for pending of cases/already decided

At the time of filing the application for advance ruling, if the Authority for Advance Ruling found that already a case is pending before any authority under any law for the time being in force the application may be rejected by the Authority for Advance Ruling.  The first proviso to section 98(2) provides that the Authority for Advance Ruling shall not admit the application 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 this Act.  No application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant. Where the application is rejected, the reasons for such rejection shall be specified in the order.

Here some of the case laws are given as to the rejection of application because of the pending cases against the applicant before some other authorities.

Pending show cause notice

IN RE: M/S. VEERAM NATURAL PRODUCTS - 2018 (9) TMI 697 - AUTHORITY FOR ADVANCE RULING, TAMILNADU,  the question sought for by the applicant for getting advance rulings is ‘What is the appropriate classification for Aluminum foil disposable container manufactured by them under GST?’. 

The Authority for Advance Ruling ruled that it is seen that the ruling is sought on the appropriate classification for Aluminium foil disposable container, which is already raised in the Show Cause Notice issued by the Department under the GST law and the proceedings are still pending.  The Authority for Advance Ruling ruled that as the question raised by the applicant in the application is already pending proceedings, in the case of the applicant themselves, the application is not admissible under the said provisions and therefore liable for rejection. 

Pending investigation

IN RE: STERLITE TECHNOLOGIES LIMITED - 2018 (9) TMI 975 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the applicant, seeking an advance ruling in respect of the following questions-

• Whether the applicant is required to separately discharge GST on the excess length of although the cost of such excess length is already included in the price charged to independent customers?
• Whether the applicant is required to separately discharge GST on the excess length of Optical Fiber although the cost of such excess length is already included in the price charged to distinct persons in terms of Schedule I provisions?
• If GST is not payable separately on the excess length, whether the Company is required to reverse proportionate credit to the extent of supply such excess length?

The jurisdictional officers have raised the objection with regard to admission of this advance ruling application and requested that it is to be rejected as the same issue is pending before the investigation authority on the same questions as raised in the application put forth before Authority for Advance Ruling.   The Authority for Advance Ruling  ruled that the application filed by the applicant is not maintainable as per the provisions of Section 98 of the CGST Act, as proceedings are already initiated against them before the filing of their present application.  

Anti evasion proceedings

IN RE: ASHOK RUBBER INDUSTRIES -2019 (2) TMI 1007 - AUTHORITY FOR ADVANCE RULINGS WEST BENGAL , the applicant is a manufacturer of rice polisher made of flexible and elastic rubber, sought an advance ruling on classification of the goods.

On 17.12.2018 the Authority for Advance Ruling received a written communication dated 06.12.2018 from the Dy. Commissioner (Anti-evasion), Kolkata North CGST & Central Excise Commissionerate, informing that the proceedings under section 71 of the GST had been initiated against the applicant. 

The first proviso to section 98(2) prohibits the Authority for Advance Ruling from admitting any application where the question raised is already pending or decided in any proceedings in the case of the applicant under any of the provisions of the Act.   It does not distinguish between stages or nature of the proceedings.  Any action lawfully taken under any provision of the GST Act is, therefore, to be construed as proceedings under the Act.  The applicant filed the application online on 22.11.2018, whereas the above central authority submits the proceedings under section 71 had been initiated on 31.07.2018.  The applicant did not dispute that officials from the concerned authority had visited his places in connection with the investigation and its subject matter was the same question on which he was seeking a ruling from the Authority for Advance Ruling.   The Authority for Advance Ruling did not admit the application.

Legal proceedings

IN RE : WAVE DISTILLERIES AND BREWERIES LTD. - 2020 (1) TMI 521 - AUTHORITY FOR ADVANCE RULING - UTTAR PRADESH the applicant sought for an advance ruling as to whether Notification No. 31/2017 - Central Tax (Rate), dated 13.10.2017 is applicable on them.   Vide letter C. No. 130/2019-20/J.C (Corp.)/VKA, dated 22-7-2019 of Shri Prashant Kumar, Joint Commissioner (Corporate Circle), Commercial Tax, Aligarh Zone, Aligarh has informed that a case on the issue is pending against the party for calculation of tax, penalty, fine and for other legal proceedings under Section 74(5).  The application shall not be admitted as per the provisions of Section 98(2) of CGST Act, 2017, as the question raised in the application is already pending with the State Tax authorities, Aligarh.

Inquiry by DGGI

IN RE: M/S. ANIK MILK PRODUCTS PRIVATE LIMITED - 2019 (11) TMI 533 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH , the application raised the question before the Authority for Advance Ruling as to whether flavored milk is taxable at the rate of 5% under Schedule IV of the GST Act.  The Authority for Advance Ruling took a note of the letter of the Joint Director, DGGI, where in it has been informed that the enquiry on this issue had been initiated by DGGI prior to filing of instant application.  Although it was incumbent upon the applicant to disclose this fact in the application under Serial Number 17, but the Authority for Advance Ruling found that nothing has been mentioned against Sl.No.17. In fact, the applicant has intentionally avoided disclosing this fact in the application just to avoid the provisions of Section 98(2).  The application filed by the applicant is rejected by the Authority for Advance Ruling as not admissible in terms of first proviso to Section 98(2) of the GST Act 2017, since the issue was already pending before another authority when the application was made before Authority for Advance Ruling.

Already decided

IN RE: M/S. HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. - 2019 (10) TMI 796 - AUTHORITY FOR ADVANCE RULING, KARNATAKA, the applicant sought for advance ruling on classification on ‘Fanta Fruity Orange’.  The Authority for Advance Ruling observed that the applicant filed an application on 27.11.2017 for advance ruling before the Gujarat Authority in respect of the same question.  The Gujarat Authority has already decided the said issue.   Therefore the Authority for Advance Ruling rejected the application filed by the applicant.

Rejection of application for want of jurisdiction

The Authority for Advance Ruling is to have territorial jurisdiction to decide an application.  If it is not having jurisdiction, it is possible for the application to be rejected as non maintainable.  

IN RE : HINDALCO INDUSTRIES LIMITED - 2018 (10) TMI 304 - AUTHORITY FOR ADVANCE RULING - UTTAR PRADESH, the Authority held that as the registered persons are outside the territorial limits of State of Uttar Pradesh, the present application is outside the scope of Jurisdiction. The Authority for Advance Ruling ruled that the present Advance Ruling application is dismissed as not maintainable.

IN RE: M/S. KONKAN LNG PRIVATE LIMITED - 2019 (7) TMI 617 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the Authority for advance Ruling ruled that the applicant is a recipient of work contract service of construction of break wall, the Authority for Advance Ruling has no jurisdiction to give any ruling on its query regarding rate of GST on the said services.

IN RE: DAEWOO-TPL JV - 2019 (7) TMI 1229 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the Authority for Advance Ruling held that the query in the present application is in respect of formula involved in calculation of the refund which is not within the jurisdiction of the Authority for Advance Ruling.

IN RE: RAJENDRABABU AMBIKA (PROPRIETRIX OF M/S. SRI DHANALAKSHMI WELDING WORKS) - 2019 (7) TMI 809 - AUTHORITY FOR ADVANCE RULING, TAMILNADU, one of the questions on which the applicant sought for advance ruling is for the clarification of the applicability of e-way bill procedures for their business activities which involves goods sent on delivery challan or erection purpose and bill made subsequently and for taking back the machinery to their place for maintenance and what are the transport documents to be used for the business activities.    The Authority for Advance Ruling rejected the application on the ground that the e-way bill procedure is not covered under the jurisdiction of the advance ruling.

Rejection of application beyond the scope of advance ruling

Any question, other than the questions mentioned in section 97(2) of the Act, sought for advance ruling will be beyond the scope of advance ruling.  In such cases the application is rejected as the application is not maintainable.  The Authority for Advance Rulings rejected the applications filed for seeking advance ruling before the Authority for Advance Ruling.

IN RE: M/S. VENKATA RAO TIRUPATHI- 2019 (12) TMI 98 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH, the applicant is a works contractor.  The applicant paid the tax under the head ‘cess’ instead of CGST on 23.10.2017. Again tax paid under the head CGST on 03.07.2018. The applicant sought for advance ruling as to whether the interest is to be paid in the intervening period i.e., 23.10.2017 to 03.07.2018.    The Authority for Advance Ruling ruled that the applicant sought advance ruling in an issue of applicability of interest for the intervening period in the context of payment done under one Head i.e., Head of Cess instead of the other i.e., under the Head of CGST with a time gap of 8 months between the two payments, which is outside the purview of the Advance Ruling Authority as per Section 97(2) of CGST Act, 2017.  The Authority for Advance Ruling did not admit the application.

IN RE: M/S. BARBEQUE NATION HOSPITALITY LTD. - 2020 (1) TMI 792 - AUTHORITY FOR ADVANCE RULING, KARNATAKA, the Authority for Advance Ruling observed that in the instant case the questions, on which the applicant seeks advance ruling, are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant, but in relation to the service(s) being received by them. Therefore the instant application is beyond the jurisdiction of this authority and hence is liable for rejection.

Other grounds

Infructuous application

IN RE: TECHNIP UK LIMITED - 2019 (4) TMI 806 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, the applicant is an unregistered person.  The applicant sought for advance ruling on the applicable rate of tax on the proposed to be executed by them in relation to tenders issued by the Oil and Natural Gas Corporation of India for executing erection, commissioning and installation work on turnkey basis for petroleum operations.

The Authority for Advance Ruling, during the personal hearing, found that Oil and Natural Gas Corporation has awarded the contract to the consortium of BHGE McDermott and L&T Hydrocarbon on 01.10.2018 and not to the applicant consortium.  The applicant is not a member of BHGE consortium.  In the present case the tender contract is awarded to a consortium other than the applicant and as such the possibility of supply of goods or services or both by the applicant pertaining to the said contract is no more available.   The Authority for Advance Ruling ruled that the application is infructuous and hence the questions raised in the application are not answered.

Liquidated damages

IN RE : MAHARASHTRA STATE POWER GENERATION COMPANY LIMITED - 2018 (5) TMI 1332 - AUTHORITY FOR ADVANCE RULING - MAHARASHTRA, the applicant sought for an advance ruling on whether the contractor/vendor will be able to utilize the amount of liquidated damages imposed over him as input tax credit subject to satisfying all other conditions.  The Authority for Advance Ruling ruled that the said question is not answered as the proper person to raise this question would be the contractor/vendor and not the applicant.