2024 (10) TMI 1421 - AAAR - GST

Timeliness of the appeal filed by the Appellant - Levy of GST - rate of tax - work carried by the applicant is a Composite supply of work contract involving pre dominantly earth work provided to a Government Entity - applicability of Serial No. 3, Heading 9954 of Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017 and as per Notification No. 31/2017-Central Tax (Rate), dated 13.10.2017 both under the CGST Act, 2017 and the corresponding State Tax notification under HGST Act, 2017 - HELD THAT - It was observed that the Appellant vide letter dated 13.01.2021 informed the Members of the Authority of Advance Ruling that M/s. KBPL has mis-stated the facts in their application filed before the Authority of Advance Ruling as they tick marked against S. No. 17 (at point 'a') that the question raised in the application was not already pending in any proceedings in their case under only of the provisions of the Act, WHEREAS proceedings on the same issue had already been commenced by the Gurugram Zonal Unit of the DGGI on 06.03.2019 which later culminated into Show Cause Notice dated 09.10.2020. Thus 'KBPL' has suppressed the material facts from the Authority of Advance Ruling. It is clear that M/s KBPL had mis-declared the facts before the Authority for Advance Ruling for obtaining the ruling; that the Appellant had filed the instant appeal before this authority (Appellate Authority for Advance Ruling); that thereafter informed the AAR about such mis-declaration of facts; that on being informed by the Appellant, the AAR had declared the Ruling to be VOID ab initio in terms of powers given under Section 104 of the Act. Since Ruling given has been held Void ab initio by the AAR, the appeal filed by the Appellant appears infructuous and merits to be dismissed. The appeal filed by the Commissioner, CSGT, Rohtak is dismissed as Infructuous.

Summary

Issues Involved:

1. Timeliness of the appeal filed by the Appellant.
2. Classification of the contract as a composite supply of works contract involving predominantly earth work.
3. Suppression of material facts by the Respondent.
4. Applicability of Section 104 of the CGST Act, 2017 regarding voiding the advance ruling.

Issue-wise Detailed Analysis:

1. Timeliness of the Appeal:

The appeal was filed by the Commissioner, CGST, Rohtak against the Advance Ruling dated 28.08.2020. The order was received by the Appellant on 19.11.2020, and the appeal was filed on 15.01.2021. This filing was not within the time limit prescribed under Section 100(2) of the CGST Act, 2017. The Appellant requested condonation of the delay, but the judgment primarily focused on other substantive issues.

2. Classification as Composite Supply of Works Contract:

The core issue was whether the contract awarded to M/s KSC Buildcon Private Limited (KBPL) by HSIIDC constituted a "Composite supply of works contract" involving predominantly earth work, thereby attracting a 5% GST rate as per Serial No. 3 of Notification No. 31/2017-Central Tax (Rate). The AAR initially ruled that the work carried out by KBPL was indeed a composite supply of works contract involving predominantly earth work, thus applicable for the concessional GST rate. The Appellant contested this, arguing that the activities primarily involved renting of machinery, classifiable under Heading No. 9973, and not eligible for the concessional rate.

3. Suppression of Material Facts:

The Appellant argued that KBPL had suppressed material facts by not disclosing that proceedings on the same issue were already initiated by the Directorate General of Goods & Service Tax Intelligence (DGGI) before filing the application for advance ruling. As per Section 98(2) of the CGST Act, 2017, an application for advance ruling should not be admitted if the question raised is already pending in any proceedings. The Appellant highlighted that KBPL mis-stated facts in their application, leading to the AAR admitting the application improperly.

4. Applicability of Section 104 of the CGST Act, 2017:

Upon being informed by the Appellant about the suppression of facts, the AAR exercised its powers under Section 104 of the CGST Act, 2017, declaring the advance ruling dated 28.08.2020 as void ab initio. Section 104 provides that if a ruling is obtained by fraud, suppression, or misrepresentation of facts, it can be declared void ab initio. Consequently, the ruling was rendered non-existent, applying all provisions of the Act as if the ruling had never been made.

Conclusion:

The Appellate Authority for Advance Ruling concluded that since the initial ruling was declared void ab initio due to suppression of facts, the appeal filed by the Appellant became infructuous. Therefore, the appeal was dismissed as infructuous, resolving the issues primarily on procedural grounds rather than substantive tax classification.