2021 (2) TMI 995 - AAAR - GST

Appeal against the rejection of application for Rectification of mistake (ROM) by the AAR - Liability of GST - work executed under JDA on land owner's portion where work commenced during pre-GST and continued under GST law - Rate of tax - HELD THAT - An advance ruling pronounced by the Authority under Section 98(4) may be appealed against to the Appellate Authority within a period of 30 days from the date on which the ruling sought to be appealed against is communicated to the aggrieved person. However, the Appellate Authority may, if it is satisfied that the appellant was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days. In terms of Section 101, the Appellate Authority may pass such order as it thinks fit, confirming or modifying the ruling appealed against. Further, Section 102 of the CGST Act, provides for rectification of advance ruling whereby the Authority or the Appellate Authority may amend any order passed by it under section 98 or section 101, so as to rectify any error apparent on the face of the record, if such error is noticed by the Authority or the Appellate Authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer, the applicant or the appellant within a period of six months from the date of the order. It is clear that even in cases where a rectification of mistake application is admitted and a mistake apparent on record is corrected, the original order is not set aside. The original order remains on record and only the mistakes are corrected therein. The principle of doctrine of merger will not apply in such cases. Any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes. The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections. The appeal should have been filed by the Appellant against the advance ruling order dated 25-07-2019 within the period of 30 days from the date of communication of the said order or such extended period as permitted in terms of the proviso to Section 100(2) of the CGST Act. The appeal filed against the ROM order KAR ROM 03/2020 dated 11-09-2020 is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017 - the ROM rejection order dated 11-09-2020 does not merge with the original advance ruling dated 25-07-2019. Since the appeal is not maintainable, the question of addressing the issues raised in appeal as well as the condonation of delay application do not arise. Appeal dismissed as not maintainable.

Summary

Issues Involved:
1. Liability of GST on work executed under Joint Development Agreement (JDA) for landowner’s portion.
2. Valuation of tax for work executed under JDA.
3. Rectification of Mistake (ROM) application and its rejection.
4. Admissibility of appeal against ROM rejection order.
5. Time limitation for filing an appeal.

Issue-wise Detailed Analysis:

1. Liability of GST on Work Executed Under JDA for Landowner’s Portion:
The Appellant, engaged in property development, sought a ruling on whether GST is applicable to work executed under JDA for the landowner’s portion, where work commenced pre-GST and continued post-GST. The Authority for Advance Ruling (AAR) ruled that GST is applicable on the value determined as per Notification No 11/2017-Central Tax (Rate) dated 28-06-2017 at the time of transfer of possession of the landowner’s portion of the flats.

2. Valuation of Tax for Work Executed Under JDA:
The Appellant argued that the valuation method prescribed in Para 2 of Notification No 11/2017 CT (R) should not apply as there is no transfer of undivided interest in land from the developer to the landowner. The Appellant contended that the work executed by the developer for the landowner’s built-up area against receipt of undivided interest in land amounts to barter/exchange and does not attract tax under the Karnataka VAT law. They also referenced Service Tax law, arguing that the point of taxation arises on the date of entering into the JDA.

3. Rectification of Mistake (ROM) Application and Its Rejection:
The Appellant filed a ROM application to rectify the ruling, claiming inconsistency with a similar ruling in the case of M/s Nforce Infrastructure India Pvt Ltd. The Authority rejected the ROM application, stating there was no error/mistake apparent on record. The Appellant contended that the rejection was without proper reasons and bad in law.

4. Admissibility of Appeal Against ROM Rejection Order:
The Appellate Authority examined whether the appeal against the ROM rejection order is admissible under Section 100 of the CGST Act. It was determined that an appeal can only be made against an advance ruling pronounced under Section 98(4). Since the appeal was against the ROM rejection order, which is not an appealable order under Section 100, it was deemed not maintainable.

5. Time Limitation for Filing an Appeal:
The Appellant argued that the limitation period for filing an appeal should be calculated from the date of the ROM rejection order. However, the Appellate Authority held that the appeal should have been filed against the original advance ruling within the statutory period of 30 days from the date of communication of the order, or within an extended period not exceeding 30 days. The rejection of the ROM application does not extend the limitation period for filing an appeal against the original order.

Conclusion:
The appeal filed by M/s Durga Projects & Infrastructure Pvt Ltd against the ROM order dated 11th Sept 2020 was dismissed on the grounds that it is not maintainable. The ROM rejection order does not merge with the original advance ruling, and the statutory time limit for filing an appeal against the original advance ruling had expired.