2024 (12) TMI 728 - HC - GST

Challenge to pre-show cause notice in Form DRC-01 A issued by respondent No. 2 to the petitioner under Section 73 (5) read with Rule 142 (1-A) of the State Goods and Services Tax Act (SGST) - seeking advance ruling on advance ruling on taxability of sale of land and buildings - HELD THAT - The respondent No. 3 cannot avoid deciding the petitioners application dated 20 December 2023 on merits based upon subsequent issues of the pre-show cause notice dated 22 October 2024. This is more so because the proviso to Section 98 (2) is quite clear, and it uses the expression already pending or decided . The phrase already pending would mean and imply that it is pending on the date of filing the application seeking an advance ruling. Directions have been issued to respondent No. 3 to dispose of the petitioners application within three months from today. This direction is based on the statement made on behalf of respondent No. 2 and also upon considering the provisions of Section 98 (6), which require the authority to pronounce the advance ruling in writing within 90 days of receiving the application. In any event, the scope of interference with pre-show cause or even show cause notice is minimal. If, ultimately, the advance ruling authority rules in favour of the petitioner, then it was pointed out by Petitioner in terms of Section 103 (1) that such advance ruling will bind not only respondent No. 2 but also the petitioner. As a matter of routine, the Petitioners must not rush to this Court bypassing alternate remedies or by filing pre-mature petitions just because they can afford to do so. There is, of late, an increased tendency to rush to this Court and take a chance to see if proceedings before the authorities are stalled even before the authorities have an opportunity to examine the cause shown and make some decision. The same applies to bypassing alternate remedies. Petition disposed off.

Summary

Issues:
Challenge to pre-show cause notice in Form DRC-01 A under SGST Act and seeking Writ of Mandamus for advance ruling on taxability of sale of land and buildings.

Analysis:
The petition challenged a pre-show cause notice issued under the State Goods and Services Tax Act (SGST) and sought a Writ of Mandamus for an advance ruling on the taxability of a sale of land and buildings. The petitioner expressed concerns that the issuance of the notice might hinder the disposal of their advance ruling application. The counsel argued that the statutory provisions required a decision on the application within 90 days, which had not been done yet. However, the respondent assured the court that the application would be decided within three months. The provisions of Section 98 of the SGST Act were extensively discussed, emphasizing the timelines and procedures for advance rulings.

The court referred to relevant case laws from the Telangana High Court to interpret the provisions of Section 98. It was noted that the authority should not reject an application if the question raised was not pending or decided at the time of filing. The court held that the subsequent pre-show cause notice should not prevent the authority from deciding the application on its merits. The phrase "already pending" was crucial in determining the timeline for considering such applications. The court emphasized that the authority must decide the application without being influenced by subsequent issues like show cause notices.

The petitioner sought a restraint on the proceedings related to the pre-show cause notice until the application was decided. However, the court declined this request, citing minimal scope for interference with such notices. The court highlighted the importance of exhausting alternate remedies before approaching the court prematurely. Ultimately, the court disposed of the petition by issuing directions for the timely disposal of the application and emphasized the need to follow due process and exhaust alternate remedies before seeking court intervention.