9911796707
TMI BlogADVANCE RULING ON COMPOSITE SUPPLY –DECLARED VOID AB- INITIO BY APPELLATE AUTHORITYX X X X Extracts X X X X X X X X Extracts X X X X ..... ADVANCE RULING ON COMPOSITE SUPPLY –DECLARED VOID AB- INITIO BY APPELLATE AUTHORITY - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 30-1-2020 - - In Re: Arihant Enterprises 2019 (11) TMI 397 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA , an appeal had been filed by Revenue Department against AAR, Maharashtra ruling dated 19.03.2019. [ IN RE: ARIHANT ENTERPRISES 2019 (4) TMI 808 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA ]. In the instant case, assessee was engaged in the business of reselling of Ice Cream from its Ice cream parlour situated in Aurangabad which were supplied with the said goods from its sole manufacturer, M/s. Kamaths Ourtimes Icecreams Pvt. Ltd. (Franchisor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r KOTI). They exclusively dealt in the Naturals brand Ice cream manufactured by the franchisor. The applicant sought advance ruling on the following questions: Whether supply of ice-cream by the applicant from its retail outlets would be treated as supply of goods or supply of service or a composite supply and subject to GST accordingly? Whether the supply, not being a composite supply, would be treated as supply of service in terms of entry 6(b) of Schedule II attached to the CGST Act, 2017 and leviable to CGST@2,5% in terms of Notification No. 11/2017 as amended by Notification No. 46/2017'-Central Tax (Rate) (serial No. (i) entry No. 7) of the notification? In case the supply is held to be composite sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply , whether the taxability of the same should be treated as supply of service in terms of entry 6(b) of the Schedule II of the CGST act, 2017 or should be taxable on the basis of nature of principal supply in accordance with Section 8 of the Act? In case the supply is held to be a supply of service in terms of entry 6(b) of Schedule II to the CGST Act, 2017 , would it be mandatory for the applicant to collect and pay CGST@ 2.5% inspite of the fact that entry 7(i) of Notification No. 11/2017 as amended by Notification No.46/2017-Central Tax (Rate) is a conditional entry? AAR ruled that the supply of ice-cream by the applicant from its retail outlets would be treated as supply of goods and would not be treated as supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of service in terms of entry 6(b) of Schedule II attached to the CGST Act, 2017 . Accordingly, following ruling was pronounced : Supply of ice-cream by the applicant from its retail outlets would be treated as supply of goods or supply of service or a composite supply and subject to GST. The supply, not being a composite supply, would not be treated as supply of service in terms of Entry No. 6(b) of Schedule II attached to the CGST Act, 2017 and leviable to CGST @ 2.5% in terms of Notification No. 11/2017 as amended by Notification No.46/2017-Central Tax (Rate) (serial No. (i) Entry No. 7) of the notification. Not answered in view of ruling in Q(i) Not amend in view of ruling in Q(i) The AAAR observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that section 98(2) provides that the application shall not be admitted where the question raised is already pending under any of the provisions of this act. The term any of the provisions of this act includes investigations proceeding under section 67 . It was clear from the record submitted by the DGGI that proceedings was pending against KOTI (Kamat Ourtimes Ice-cream Ltd), and the issue taken up in the proceedings related to the classification of the activities ice-cream sold from the natural outlets - whether the supplier of goods would be charged at the rate of 18 % under HSN 2105 by availing ITC or whether the activity should be classified as supply of service under SAC -996331 at the rate of 5 % without ITC. Further, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared from the sequence of events that applicant-respondent was aware of the DGGI proceedings against KOTI and therefore it filed an application and moreover, kept the fact away from the advance ruling authority. This amounts to nothing but suppression of facts and therefore the advance ruling is void as it is obtained by suppressing the vital fact that proceedings were initiated by DGGI against KOTI and were pending as on the date of filing of advance ruling application. There was a deliberate intention on the part of KOTI as well as its applicant-respondent to obtain a decision clandestinely without revealing the issue of investigation being initiated against KOTI on the very same issue that was raised before the AAR. As per sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 104 , power have been given to the Appellate Authority to declare an order u/s.98(4) to be void ab-initio in case it is obtained by fraud or suppression of material facts or misrepresentation of facts. There is a premeditated and a conscious action on the part of the applicant-respondent to undermine the process of the Advance Ruling and an attempt to use it to satisfy their own ends. AAAR, therefore, held that the order of the AAR is void ab-initio as it was vitiated by the process of suppression of material facts. Our above view is fortified by the Hon. Supreme Court decision in the case of SP CHENGALVARAYA NAIDU VERSUS JAGANNATH [1993 (10) TMI 315 - SUPREME COURT] The Supreme Court in the case stated that it is the settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non-est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings. The Court went on to observe that the High Court in that case was totally in error when it stated that there was no legal duty cast upon the plaintiff to come to the Court with a true case and prove it by true evidence and opined that The courts of low are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. The AAAR therefore, allowed the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and declined the AAR order as void ab initio as it was vitiated by the process of suppression of material facts. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
