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TMI Blog2022 (12) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the provisions in the said Act - the proper officer under this Act shall have the power to summon any person either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure. Such enquiry referred to in sub-section (1) shall be deemed to be judicial proceedings within the meaning of section 193 and 228 of the Indian Penal Code. Thus, the proceedings conducted by the investigating authority under the provisions of this Act shall be construed as judicial proceedings as per the CGST/APGST Act. Having regard to the legal position that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98, the ARA should not have admitted the application in the instant case and issued its ruling. Therefore, the said order dated 05.03.2020 is vitiated by law - the order dated 05.03.2020 of ARA and order dated 28.09.2020 of the appellate authority are set aside and the petitioner is given liberty to appear before the appropriate authority and submit his expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is that even by the date of filing of application before ARA on 15.12.2020, the GST has already cancelled the registration under GST Act of the petitioner and further the Director General of Goods and Services Tax Intelligence (herein after, DGGSTI ), Visakhapatnam, had called for certain documents and enquired about the payment of GST on the services provided by the petitioner and the petitioner had submitted the documents called for and also gave the statement submitting that there was no tax on the educational services submitted by him. The copies of summons dated 01.07.2019 and 11.09.2019 were issued to the applicant by the DGGSTI in that regard. Learned counsel would submit that all these facts were succinctly narrated by the petitioner in Para 11 of his application. It was also brought to the notice of ARA that show-cause notice was not issued and no docket proceedings were pending against the applicant by the date of its application. Learned counsel would strenuously argue that the above proceedings would indicate that the DGGSTI had already commenced investigation as against the petitioner even before he filed application before ARA and in that view, in the light of fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to set aside the order AAR No.08/AP/GST/2020, dated 05.03.2020, passed by the ARA as well as the order AAAR/AP/04(GST)/2020, dated 28.09.2020 and give liberty to the petitioner to agitate his case on all the legal and factual grounds which are available to him and the investigating authorities may be directed to consider those grounds without reference to the observations in the order dated 05.03.2020 of the ARA and the order dated 28.09.2020 of the Appellate Authority. 5. Learned Senior Standing Counsel filed counter and opposed the writ petition. He would submit that the order of the appellate authority is perfectly valid and legal and therefore, there is no requirement to interfere with the same. He prayed to dismiss the writ petition. 6. The point for consideration is whether there are merits in the writ petition to allow? 7. As can be seen, the main thrust of argument of learned counsel for petitioner is that in view of the commencement of the investigation by the DGGSTI even before the submission of application by the petitioner, the ARA ought not to have admitted his application. In this regard, it is apposite to refer to section 98 of the CGST/AP GST Act, which rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /APGST says that authority may after examining the application and records called for and after hearing the applicant or his authorized representative, by order, either admit or reject the application. Thus, the subsection (2) says that after hearing the petitioner or his authorized representative, the authority may either admit or reject the application. However, for admitting the application of the applicant, a qualification is provided in the form of proviso to the said section. The proviso says that the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions in the said Act. Thus, it is needless to emphasize that the first proviso puts an embargo on the authority of the ARA to admit an application. The said embargo says that where the questions raised in the application are already pending or decided by any proceedings in the case of an applicant under any of the provisions of the CGST/APGST Act, the authority shall not admit the application. The submission of the petitioner herein is that the phrase any proceedings encompasses the investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity Directorate General of GST Intelligence, Bangalore against the applicant and incident report was issued on 17.01.2019; that this fact of investigations conducted by DGGI against the applicant was not brought to the notice of the Authority; that the Advance Ruling thus obtained by keeping the Authority for Advance Ruling in the dark appears to be not a legal and correct order and therefore it should be appealed against as the subject order of the Authority appears to be invalid ab initio. They referred to the proviso to Section 98(2) of the CGST Act which states that advance ruling cannot be obtained when investigations have been initiated; that it has been brought to their notice that a number of cases have been booked by DGGI across India and in some cases the taxpayers have admitted the stand of the Department and made the payments of differential tax. The Appellant submitted that since huge revenue is at stake, the ruling of the lower Authority should be held as void ab initio. x x x x x x 15. It becomes clear from the above that the respondent KCMPFL made an application for advance ruling on 20th March, 2019 all the while being aware of the investigation being co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority for Advance Ruling, Maharastra, was considering the effect of commencement of the investigation prior to the submission of application by an applicant before the concerned advance ruling authority. In that context, it was observed thus: 165. Thus, it is seen from the above facts of the case that investigations proceedings were approved on 15.01.2019 and the search was conducted on 5.2.2019. The statement of the Director of KOTI u/s 70 was recorded on 5.2.2019, and the statement of M/s Srinivas Kamath (Wholetime Director of KOTI) was recorded on 11.2.2019. The application for advance ruling was filed on 25.2.2019 by the applicant respondent at the behest of KOTI. It becomes clear from the above that 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 ARA. The authority has ultimately set aside the order passed by the ARA declaring the same as void ab initio. 11. Thus, the above jurisprudence tells us that any proceedings referred to in 98(2) proviso encompasses within it ..... 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