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TMI Blog2024 (5) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... the West Bengal Authority for Advance Ruling (hereinafter referred to as the 'WBAAR'). 2. The appellant, is a company incorporated under the Companies Act, 1956 having its principal place of business at Maity Para, Delhi Road, Hooghly, West Bengal 712311. The appellant had entered into a leasing agreement with the Shyama Prasad Mukherjee Port, Kolkata (hereinafter referred to as SMPK) to lease a plot of land at Taratala Road for thirty (30) years for the purpose of setting up a commercial office complex. As per the allotment letter bearing no. Lnd. 6063/22/2869 dated 21.09.2022, an amount of Rs. 39,00,11,000/- would have to be paid by the appellant as upfront lease premium along with GST @ 18% on the aforesaid amount. 3. The appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017, (hereinafter collectively referred to as "the GST Act") on the following question: * Whether the upfront premium payable by the applicant towards the services of leasing of the land for industrial purposes by SMPK is exempted under entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Port Authorities Act, 2021, which govern the composition of SMPK's Board. iv. The appellant further referred to the section headings of the Major Port Authorities Act, 2021 and, in particular, highlighted Section 51 of Chapter V, which pertains to the Supervision of the Central Government specially mentioning Section 51 of the Act, which prohibits the "Board from selling, alienating, or divesting its assets, properties, rights, powers, and authorizations without the sanction of the Central Government." v. The appellant stated that from the scheme of the Act supra, it was clear that the said Act is formed for the purposes of regulation, operation and planning of Major Ports in India and to vest the administration, control and the management of such ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto. vi. Additionally, in regard to the establishment of the Board of Major Port Authority, Section 3 of the Major Port Authorities Act, 2021 was referenced by the appellant. vii. The appellant stated that for exemption under SI. No. 41 of Notification No. 12/2017-CT (R) dated 28.06.2017, as amended from time to time, the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity and was liable to be set aside in totality. 9. Personal Hearing: 9.1 During the course of hearing held on 20.03.2024, the appellant's authorised representative reiterated the points as stated in their Appeal. The appellant's authorised representative requested a short adjournment to provide additional submissions in support of their case in response to a specific query raised by this Authority regarding the applicability of other conditions to qualify for exemption under entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The prayer was approved by this Authority, and the next hearing was scheduled on 02.04.2024 at 11:00 hrs. 9.2 The representative of the Revenue provided a written submission to this Authority which was reiterated in their oral presentation. The submission made by the Revenue included the following points: i. The relevant portion of the entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 was referred by the Revenue, stating that the appellant is not eligible for the exemption benefit as SMPK does not meet the criteria of being a State Government Industrial Development Corporation or Undertaking, or any other e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that in normal course of time, the Central Government does not have any control in the management of the Board, and it operates as an autonomous body. It was also mentioned by the Revenue that the Central Government only plays a supervisory role and should not considered to have ownership, by way of control, in SMPK. viii. Article 149 of the Constitution of India was cited by the Revenue to argue that the audit of SMPK is conducted by the CA&G, but this does not establish that the Central Government owns SMPK. ix. The Revenue relied on the judgement passed by the Hon'ble Supreme Court of India in the case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar & Co. (Civil Appeal No. 3327 of 2007, where the Hon'ble Apex Court has held that: "(1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee, and it must be interpreted in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Cent) Condition 41 Heading 9972 Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 20 percent or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area. Explanation - For the purpose of this exemption, the Central Government, State Government or Union territory shall have 20 per cent or more ownership in the entity directly or through an entity which is wholly owned by the Central Government, State Government or Union territory. NIL Provided that the leased plots shall be used for the purpose for which they are allotted, that is, for industrial or financial activity in an industrial or financial business area: Provided further that the State Government concerned shall monitor and enforce the above condition as per the order issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the WBAAR in their above-mentioned Order. 10.5 We also find that the counter arguments put forth by the Revenue in respect of all the above conditions were also mentioned by the WBAAR in their Order for Advance Ruling. 10.6 However, it is found that observation and findings of the WBAAR were essentially limited to a single condition, that is, whether SMPK can be regarded as an entity having 20 percent or more ownership of the Central Government and the WBAAR has rendered its Ruling on the basis of their observation and finding on that particular point, only. 10.7 We feel that the WBAAR would have adopted a more comprehensive approach in rendering its ruling in the present case if it had documented its observations and findings regarding satisfaction of all the conditions required for deciding the eligibility for the exemption under entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 10.8 We therefore find that the WBAAR order requires modification as while pronouncing the Advance Ruling in the instant case ruling/order issued is restricted to a single condition of the pertinent notification. 10.9 In this regard, we also rely on the order of the Principal ..... 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