9911796707
TMI Blog2024 (7) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it 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 appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Excess demand and excess energy charges 18. Charges for providing CMRI data 19. Recoveries from consumers for damage to board properties 20. Changing meter at the request of the consumer 21. Inspection charges 22. Levy of charges for reduction in demand 23. Changing/shifting of meter board/LTCT box/HT box due to damage or for accommodating additional safety features 24. Replacement of damaged/burnt meter 25. Temporary disconnection at the request of the consumer 26. Charges for furnishing certified copies of documents to consumer 27. Additional surcharge 28. Tariff change 29. Dismantling charges The Authority for Advance Ruling (AAR) vide Ruling No. 122/AAR/2023 dated 19.12.2023 ruled that the charges collected by the Appellant for the activities, viz., Belated Payment Surcharge, Dishonoured cheque service charge, and Network/Wheeling charges are exempted from GST as per entry No. 25 of the Notification No. 12/2017-CT (Rate) dated 28.06.2017, and that all other charges are liable for GST at the appropriate rates. 3.2. Aggrieved, the Appellant has filed the present appeal. Under the grounds of appeal as submitted by the Appellant, it is seen that they h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.6.1 of the impugned ruling is that the ten charges referred therein are ancillary to transmission and distribution of electricity. The very meaning of "ancillary", is "providing necessary support to the main work or activities of an organization." Therefore, the AAR erred in not holding these services to be naturally bundled in the ordinary course of business with the principal supply of electricity by a transmission and distribution utility. Moreover, it is a further noted position from the Electricity Supply Code in paragraph 2.2 in the impugned order that all these charges referred to in the proceedings are those prescribed statutorily under the Electricity Act, 2003 by way of notifications issued. iii) Similarly, the seventeen charges enumerated in paragraph 5.6.3 of the impugned order are also found by the AAR to be ancillary to the principal supply. Here again, the AAR erred in not finding them to be 'composite supply" for the same reason as stated above. iv) In this regard, it may also be noted that the Hon Hole Rajasthan High Court also held in the case of Jodhpur Vidyut Vitran Nigam Ltd., 2022 (56) G.S.T.L. 273 (Raj.) that they were "in total agreement with the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4 They stated further that Notifications issued during the pre-Negative List era, viz., 11/2010-ST dated 27.02.2010, 32/2010 dated 22.06.2010, 45/2010-ST dated 20.07.2010, etc., do have relevance in the present scenario as well, as the clauses relating to exemption have remained the same throughout. They furnished an additional written submission during the personal hearing and they undertook to furnish any other information/document in this regard, as and when called for. 4.5 Under the additional submissions filed during the personal hearing held on 14.05.2024, the following points were highlighted, apart from reiterating the points discussed already during the personal hearing, i.e., - i) It is an admitted fact that the decisions of the Hon'ble High Courts in the cases of M/s. Torrent Power Ltd., M/s. Jodhpur Vidyut Vitran Nigam Ltd., and M/s. BSES Rajdhani Power Ltd., are holding the field and not stayed by the Hon'ble Supreme Court in the appeals filed by the Department. Therefore, these decisions of Hon'ble High Courts are binding on lower authorities in the absence of a contrary decision on the same issue, rendered by the High Court at Madras having jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltra vires to Section 8 of the CGST Act, 2017 as well as Notification No. 12/2017-CT(Rate) dated 28.06.2017[sl.no.]. This being the crux of the issue in the instant case, it is ascertained that the Hon'ble HC's order has not been accepted by the Department, and a SLP(C) Diary (Civil) No. 019431/2019 (Diary No. 24733 of 2019) has been filed before the Hon'ble Supreme Court. The Supreme Court after condoning the delay has granted leave in the said case, whereby the matter becomes sub-judice. 4.7 As the aforesaid legal position did not form part of the discussions during the personal hearing held on 14.05.2024, it was imperative on the part of Department to inform the appellant of the said legal position and seek their comments/view before proceeding further in this case. Therefore, the appellant was accorded another opportunity for hearing on 29.05.2024 to represent their stand on the issue. Accordingly, on 29.05.2024, Shri V. Ravindran, Advocate, and Smt. R. Emerald Jeeva, Financial Controller/Taxation of M/s. Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) appeared for the Personal Hearing. 4.8 When the Members cited the provisions of Section 98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d down by the Hon'ble High Court in Torrent Power is squarely covering the appellant's case in the present appeal, which fact is apparently agreed in the communication dated 24.05.2024 cited as the crux of the issue. It is further respectfully submitted that Article 261 of the Constitution mandates the application of the law laid down by the Hon'ble High Courts in any part of the country. 4. As regards the present appeal, it is submitted that the appellant is a 100% owned entity of the Government of Tamil Nadu. The appeal was filed and admitted after due process of law. The provisions of Section 101 of CGST/SGST Acts mandate disposal of the appeal by Hon'ble AAAR and this mandatory requirement is also within a time frame of ninety days from the date of fling of the appeal. Further there is no enabling provision in the law to make exception to this timeline under Sec. 101, if there is pending litigation on the issue in the appeal any third party. It is submitted that the said timeline is, therefore, inviolable under the law. 5. In this context, it is relevant to highlight the Board's e-flyer, which lauds the advance ruling mechanism as "An advance ruling helps th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. It is further highlighted that it is already over 5 years since the said SLP was filed by the department before the Hon'ble Court. The appellant apprehends that any delay in the disposal of the present appeal, particularly without expression sanction in law available in GST Acts, would cause irreparable loss and hardship to the appellant. The very purpose and the objectives of its decision to seek an advance ruling would defeat the objectives and the uncertainties would have a cascading effect on the Government owned utility. On the contrary, the Hon'ble AAAR's ruling in line with the Torrent Power case would pave way for the certainly of law and procedure under GST not only for the appellant, but would serve as a wholesome ruling having persuasive and precedence value. 9. It is respectfully submitted that the Hon'ble Supreme Court has merely granted leave to appeal against the impugned order before it in the SLP against Torrent Power case. It is on record that no stay has been granted even for the operation of the order for the parties thereto. The ratio decidendi in the Gujarat High Court and Rajasthan High Court judgments cited in the appellant's writte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited as a precedent in the present case since the issue has not reached finality, in as much as the Hon'ble High Court order has not been accepted by the Commissionerate concerned and a SLP(C) No. 019431/2019 (Diary No. 24733/2019) has been filed before the Hon'ble Supreme Court. Accordingly, the AAR had gone on to hold that the following services are taxable based on the Board's Circular cited supra, i.e.,- i) Application fee ii) Meter Rent iii) Testing fee iv) Service/line structures and equipment shifting charge. and that the following services that are akin to the one included in the exclusion clause of para 4 of the impugned Circular are also accordingly taxable, viz., v) Reconnection Charge vi) Labour charges for shifting meters or shifting of service lines vii) Charges for providing CMRI data viii) Changing/shifting of meter board/LTCT box/HT box due to damage or for accommodating additional safety features ix) Charges for furnishing certified copies of documents to consumer. x) Dismantling charge. 5.4 Likewise, we find that in para 5.6.3 of the impugned order, the AAR has reasoned out that the services mentioned below can never be termed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on utility is exempt from GST under notification No. 12/2017-CT (R), SI. No. 25. The other services such as, - i. Application fee for releasing connection of electricity; ii. Rental Charges against metering equipment; iii. Testing fee for meters/ transformers, capacitors etc.; iv. Labour charges from customers for shifting of meters or shifting of service lines; v. charges for duplicate bill; provided by DISCOMS to consumer are taxable. We find the impugned Circular stresses on the term that "Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility" alone is exempt from GST. Further, we find that aforesaid 5 services, which are in the nature of services other than by way of transmission or distribution of electricity are found to be taxable, as per the clarification provided. It is interesting to note the phrase "The other services such as" preceding the 5 specified services, in the clarification provided. This goes to prove that the intention of the circular is to keep away all those services outside the ambit of exemption even if they happen to be 'in relation' to transmission or distribution of elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in a case which is widely discussed, and the appeal is admitted by the Hon'ble Supreme Court, the matter becomes sub-judice. On this aspect, we derive strength from the Hon'ble Supreme Court judgement dated 5.02.2004 in the case involving Union of India Vs. West Coast Paper Mills Ltd., reported in 2004 (164) E.L.T. 375 (S.C), where under paras 14 and 15, it has been stated as follows,- "14. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. Once a Special leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy. 15. Even in relation to civil dispute, an appeal is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal." 5.9 At the outset, we would like to make it clear that the Authority for Advance Ruling and the Appellate Authority for Advance Ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;, the exemption as provided under clause (k) of Negative List was also available to 'service of transmission or distribution of electricity'. Even during the 'pre-Negative List era' exemption was available to 'services for transmission of electricity' separately under Notification No. 11/2010-ST dated 27.02.2010, and to 'services for distribution of electricity' under Notification No. 32/2010-ST dated 22.06.2010. The phrase 'services relating to appears only under Notification No. 45/2010-ST dated 20.07.2010, and therefore the contents of this notification assumes immense significance in the context of the case.- "Whereas, the Central Government is satisfied that a practice was generally prevalent regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as 'the Finance Act'), on all taxable services relating to transmission and distribution of electricity provided by a person (hereinafter called 'the service provider') to any other person (hereinafter called 'the service receiver'), and that all such services were liable to service tax under the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d litigation for the period prior to 2010. Other than this, the absence of the term 'services relating to' preceding 'transmission or distribution of electricity' in any other exemption Notification/Negative list, is to be seen as a conscious effort on the part of the Government to not include the services related to transmission or distribution of electricity within the ambit of exemption at any point of time after 2010. We are therefore of the firm opinion that the exemption applies only to the service of transmission or distribution of electricity and not to the other services related to it. 5.13 Under these circumstances, when the sub-judice nature of the issue involved, was brought to the notice of the appellant, an additional opportunity of personal hearing was extended to them on 29.05.2024. Accordingly, when the Members cited the said provisions Section 98 (2) of the CGST Act, 2017, for comments, the AR stated that these provisions apply only to the applicant who furnished the application for advance ruling, and that having admitted the original application, the authorities are bound to pass a ruling in the instant case. They further stated that there are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er words, the term "an applicant" has to mean any applicant and not a particular applicant. Thus, in the light of said definition, we do not find force in the applicant's argument inasmuch as the term "applicant" means any person registered under this Act and it could be best interpreted that the legislative intent in its wisdom is to draft the relevant proviso to empower the Authority to reject the application in the cases where there is repeated filing of the application before the Authority on the same issue which is either pending for decision or already decided. We find that the Appellate Authority for Advance Ruling, Uttarakhand vide Ruling No. 02/2020-21 dated 11.11.2020, in relation to an appeal filed by M/s. Vardhan Holidays, Uttarakhand, has come up with a similar view, and while referring the matter back, has directed the lower authority to examine the referred cases on merits and pass a detailed speaking order, "if they are not sub-judice." 5.16 Accordingly, we notice that apart from the three services for which a speaking order has been pronounced in the Advance Ruling No. 122/AAR/2023 dated 19.12.2023, the AAR ought to have not admitted the application filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 1.3.2018 to the extent the same reads as under is hereby struck, down as being ultra vires the provisions of Section 8 of the Central Goods and Services Tax Act, 2017 as well as Notification No. 12/2017-CT (R) serial No. 25." 5.18 Further, the appellant has contended in their written submissions filed on 29.05.2024 that the provisions of Sec. 101 of the GST Acts cited above or any Board's circulars/instructions, do not give any scope for keeping any appeal in call book on account of department's appeal against a High Court order. We would like to clarify here that transferring cases to 'call book', is an internal mechanism adopted by the Department where cases could not be decided owing to specified reasons. Further, as the term 'Call Book', or the procedures relating to the same have not been provided for under the CGST/TNGST Act, 2017 or the rules made thereunder, no comments are required to be made in this regard. Notwithstanding the same, we would like to clarify that in the instant case of the applicant, the case is neither transferred to 'Call Book', nor the decision on the same is kept pending; instead the application is actually being ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
