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TMI Blog2024 (2) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... on non-disclosure of fact of pendency of proceedings. Our view is also substantiated by the below mentioned findings. Proviso to section 98(2), ibid, clearly states that the AAR 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 of this Act; that the rejection of the application will be only after providing a reasonable opportunity and that the reasons for such rejection shall be specified in the order. Pending proceedings is not defined under the CGST Act, 2017. However, the issue is no longer res Integra having already been decided by various fora - The Hon ble High Court of Andhra Pradesh in the case of M/S MASTER MINDS VERSUS APPELLATE AUTHORITY FOR ADVANCE RULING (GST) , COMMISSIONER OF CENTRAL TAX, COMMISSIONER OF STATE TAX, UNION OF INDIA, STATE OF ANDHRA PRADESH [ 2022 (12) TMI 1029 - ANDHRA PRADESH HIGH COURT ] has held 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruling be declared as void ab initio . 2. Briefly, the facts are as follows: 3. M/s. I Tech Plast India P Ltd [the applicant] received a letter dated 15.09.2020 from Sr. Intelligence Officer [SIO], DGGI, Pune Zonal Unit, Pune which was an enquiry in relation to classification of Plastic Toys . On further inquiring, it was orally informed by the SIO that search operations were carried out at the business premises of one assessee (name undisclosed) and it was a cross inquiry of the applicant. 4. The applicant supplied the required details to DGGI. He further filed an application for Advance Ruling, before the Authority for Advance Ruling, Gujarat State (AAR) on 30.11.2020. 5. The applicant raised the following two questions vide the above application viz,- [a] What is the appropriate classification rale of GST applicable on supply of plastic toys under CGST SGST? [b] Can the applicant claim ITC in relation to CGST-IGST separately in debit notes issued by the supplier in the current financial year i.e. 2020-21, towards the transactions for the period 201 8-19 6. On 23.12,2020, GAAR conducted hearing in relation to admission and admitted the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 14.10.2020 submitted their reply and have made payment of tax of Rs. 219.50 lacs along with interest of Rs. 40.88 lacs for clearance made in the FY 2019-20. Hence it can be seen that the investigations were initiated much prior to the date of application (30.11.2020) for advance ruling filed by M/s. I Tech Plast India P Ltd. Further, the reply to DGGI letter dated 15.9.2020 was also submitted by the party on 14.10.2020 ie prior to the date of their application for advance ruling. 4. Further as per para 11 of the letter dated 20. 7.2021, M/s. I Tech had not revealed the facts of investigations being commenced by the DGGI. Pune Zonal Unit while filing the subject Advance Ruling Application dated 30.11.2020. Hence, they have suppressed the material facts of an investigation pending against them by DGGI, Pune Zonal unit on the issue of classification of plastic toys (one of the question raised) at the time of seeking advance ruling on the same. It is further mentioned at para 11 that an appeal may be filed under section 100 with the Gujarat Appellate Authority for declaring the advance ruling order data 20.1.2021 as void ah initio. 10. Registry vide letter dated 17.3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inquiry and Proceedings under the GST Law: that after analyzing the provisions of sections 70 6(2)(b) of the CGST Act, the Court held as under - 8.1 The word Inquiry , Proceedings and Subject-matter is not defined under either of the statutes. Therefore, these words have to be interpreted in the context of the aforesaid Acts. 8.2 The word inquiry in Section 70 has a specific purpose to summon any person whose can give evidence or produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensure upon the making of the inquiry or conclusion of inquiry. 8.3 Therefore, the word Inquiry in section 70 is not synonymous with the word Proceedings in section 6(2)(b) of the U.P GST Act/ CGST Act. 8.4 Provisions of Section 70 has been enacted for collecting evidence in matters involving tax evasion which may also lead to demands and recovery under Section 73 or Section 74, as the case may he. When action for assessment, demand and penalty etc. is taken, that shall amount to proceedings referable to Section 6(2)(b) of the Act but the inquiry under Section 70 is not a proceeding referable to Section 6(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [n] Reliance is also placed on the Customs Advance Ruling in the case of M/s HQ Lamps Manufacturing Co. Pvt Ltd [Ruling No. CAAR/Del/HQ Lamps/09/2022 dated 08.08.2022] wherein Customs Advance Ruling Authority while rejecting the contentions of DRI has categorically opined that an application may be considered pending before any officer only if it is pending before an officer in formal manner before an officer who is competent to answer the said question in terms of specific powers vested with the officer under the Customs Act. [o] That they wish to rely on the judgement of Hon ble Delhi High Court in the case of Spraytec India Ltd. [MANU/DE/1203/2023], wherein the Hon ble Delhi Court while rejecting the appeal of DRI has categorically held that since no pre-consultation notice or show cause notice had been issued by DRI or any other Authority, it would be erroneous to hold that the question of classification was pending before any Custom officer, Appellate Tribunal or any Court. [p] That the term proceedings as per the proviso, does not cover any and all steps/actions that the Department may take under the Acts; that it includes within its ambit any proceedings t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure on receipt of application. (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the concerned officer and. if necessary, call upon him to furnish the relevant records : Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, he returned to the said concerned officer. (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided 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 of this Act : Provided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant : Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. Section 104. Adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced below for ease of reference viz,- 3. As per Notification 01/2017-Central Tax (Rate) dated 28.06.2017, plastic toys being supplied should rightly be classified at S No 153 of Schedule III of the Notification 01/2017-Central Tax (Rate) as any chapter Goods which are not specified in Schedule-I, II, IV, V or V attracting CGST 9% and similarly SGST @ 9% and IGST@ 18%. Accordingly, investigations were initiated on the vendors supplying Plastic toys and paying GST 12%. 4. Acting on the afore-cited information, investigations were initiated under letter mode by the DGGI, Pune Zonal Unit. One such vendor who is paying IGST@ 12% is M/s I Tech to whom letter was written on 15.09.2020 calling for all the relevant documents/records for the period 01.07 2017 to 31.03.2020. Preliminary scrutiny of the records/documents inter-alia confirmed that M/s I Tech have supplied Plastic toys by charging and paying IGST @12% instead of 18% as detailed above. During the course of preliminary investigations M/s I Tech accepted the short payment vide their letter dated 14.10.2020 and initially paid differential GST by issuing debit note for the supplies made during the period F.Y. 2019-20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been issued or when an order is already passed on the question on which a ruling is sought; that the provisions of the proviso to section 98(2), ibid will not be attracted in the facts circumstances of the present dispute. 19. Sequence of events show that the first letter was sent by DGGI to the applicant on 15.9.2020, which was followed by further letters. Thereafter, an incident report No. 72/GST/2020-21 dated 29.10.2020, was issued according to which the applicant consequent to accepting short payment of tax paid the differential amount of IGST of Rs. 2.19 crores along with interest of Rs. 40.87 lacs for FY 2019-20 by filing GSTR-3B in the month of September 2020. The application as is already mentioned was filed on 30.11.2020 post the aforementioned events/happenings. This is not being factually disputed. 20. Now, the question that arises before us is whether a person who is chargeable with tax and who opts to pay the differential duty along with interest for whatever reasons, can the applicant post such payment claim that no proceedings under the Act were initiated/pending against him. 21. After taking into consideration the submissions of the applicant, CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before it. (ii) Aggrieved by the above rulings, the petitioner filed appeal before the appellate authority for advance ruling and after hearing, the appellate authority dismissed the appeal on 28.09.2020 by confirming the rulings made by the ARA. Aggrieved, the present writ petition is filed by the petitioner. .. 11. Thus, the above jurisprudence tells us that any proceedings referred to in 98(2) proviso encompasses within it the investigation against the applicant as per the provisions of CGST/APGST Act and if by the date of filing of the application before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling. Learned Senior counsel for respondent has not placed any contra citations before us to hold any other view. 12. Coming to the instant case, summons were issued to the petitioner on 01.07.2019 by Senior Intelligence Officer, DGGSTI and the panchanama was recorded on 01.07.2019. Copy of panchnama proceedings filed along with the writ petition contains a detailed examination of the petitioner by the Senior Intelligence Officer. The question numbers 9 to 16 relate to the courses conducted by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that the authority may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant as if such Advance Ruling had never been made. 22.7 As is mentioned supra, the Hon ble Andhra Pradesh High Court has already held that when investigation has already commenced prior to the filing of application, the Advance Ruling Authority shall not admit the application as per proviso to sub-section (2) of Section 98. In this case, the facts reveal that the applicant was aware of the fact DGGI Pune was conducting an investigation and in agreement where to the applicant had without protest paid the differential duty. Post this, the applicant cannot feign ignorance more so since they had deposited a huge sum as differential duty, which is mentioned in the Incident Report issued by DGGI. 23. In view of the foregoing, we rule that the GAAR Order No. GUJ/GAAR/R/10/2021 dated 20/01/2021 was obtained by the applicant by suppression of material facts and misrepresentation of facts and is therefore clearly hit by section 104 of the CGST Act, 2017. We therefore term the said order to be void in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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