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2022 (7) TMI 131 - HC - GSTBenefit of entry No. 74 of exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - Naturopathy Centre - classifiable under SAC Heading 9993 or not - HELD THAT - The grievance of the petitioner is that the Authority for Advance Ruling proceeded to return a finding that this was a case of supply of composite service and, consequently, the petitioner has been denied the benefit of the aforesaid exemption notification. Learned counsel for the petitioner submits that this was not even the stand of respondent-department before the Authority and, therefore, the petitioner was taken by surprise upon receiving the impugned order passed by the Authority for Advance Ruling. He submits that the petitioner specifically raised this ground in its appeal before the Appellate Authority. However, the Appellate Authority has not considered the said aspect in its impugned order. The learned counsel for the respondents are not in a position to dispute the aforesaid submission of the petitioner. This is also evident from the reading of the impugned orders passed by the respondent Authorities. Matter remanded back to the Appellate Authority for reconsideration of the appeal preferred by the petitioner - petition allowed by way of remand.
Issues:
1) Challenge to impugned ruling/order by Appellate Authority for Advance Rulings dated 10.03.2022 and Authority for Advance Rulings dated 28.09.2021. 2) Petitioner seeking mandamus for Naturopathy Centre to be eligible for exemption under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 3) Dispute regarding classification of Naturopathy Centre as a stand-alone facility separate from hotel business. 4) Allegation of surprise due to Authority's finding on composite service and denial of exemption. 5) Request for reconsideration by Appellate Authority on the aspect of services not being covered by the definition of composite supply. Analysis: 1) The petitioner challenged the ruling/order by the Appellate Authority for Advance Rulings dated 10.03.2022 and the Authority for Advance Rulings dated 28.09.2021. The petitioner sought a mandamus for their Naturopathy Centre to be considered eligible for the benefit of entry No. 74 of exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, classified under SAC Heading 9993. 2) The petitioner contended that their Naturopathy Centre, though situated within a hotel premises, is a distinct entity from the hotel business. The petitioner expressed dissatisfaction with the Authority's finding that the services provided constituted a composite supply, leading to the denial of the exemption. The petitioner argued that this stance was not presented by the respondent-department before the Authority, causing surprise upon receiving the unfavorable order. 3) The learned counsel for the respondents did not contest the petitioner's submission, indicating agreement with the petitioner's position. Consequently, the High Court quashed the order dated 10.03.2022 by the Appellate Authority for Advance Ruling and remanded the matter for reconsideration. The Appellate Authority was directed to allow the petitioner to present its case, particularly emphasizing that the services provided may not fall under the definition of composite supply. 4) The High Court clarified that it did not assess the merits of the petitioner's plea, leaving the Appellate Authority to form an independent judgment on the matter. The petition was disposed of accordingly, with an indication that the Appellate Authority retains the discretion to evaluate the case on its own terms. Additionally, the Interim Relief Application (IA No. 01 of 2022) was also resolved by the Court.
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