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TMI Blog2024 (10) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... the investigation proceedings precedes the application for advance ruling. Further, it is seen that while the application for advance ruling in the instant case was received on 28.06.2022, the first summon issued by the Senior Intelligence Officer, DGGI, Chennai Zonal Unit is dated 12.04.2022 based on which a statement has been recorded from Dr. S. Ani Grace Kalaimathi, Registrar of Tamil Nadu Nurses and Midwives Council on 18.04.2022, wherein the details of charges/fees collected by Tamil Nadu Nurses and Midwives Council for the period from 01.07.2017 to 31.03.2022, through their letter in Ref. No. 1538/NC/2022 dated 18.04.2022 is seen to have been communicated. Through another statement dated 14.06.2022, the legalities relating to taxability in the instant issue, is seen to have been discussed in a detailed manner. The initiation of investigation by way of issue of summons; recording of statements dated 18.04.2022 and 14.06.2022; furnishing of details/ documents by the applicant on 18.04.2022 in relation to the issue involved in the instant case; issue of Incident Report No. 89/2022 dated 24.06.2022 issued by the DGGI, Chennai Zonal Unit, all precede the date of filing of advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Visitors, auxiliary Nurse-Midwives and Dhais in the State of Tamil Nadu. 2.2 The said Act vide Section 11, inter alia, provides for regulating the conduct of any examination which may be prescribed as a condition of admission to the register, and any matters ancillary to or connected with such examinations; determining the manner in which all fees levied under the said Act and all moneys received by the Council shall be applied for the purposes of the said Act. 2.3 Section 12 of the said Act, inter alia, provides for regulating the compilation, maintenance and publication of the register; for regulating and supervising the practice of their profession by registered nurses, midwives, health visitors, auxiliary nurse-midwives and dhais; for regulating the publication of the names of registered nurses, mid-wives, health visitors, auxiliary nurse-midwives and dhais and their residences; for prescribing the rates of fees to be charged for examinations prescribed for admission to the register and for registration. 2.4 On interpretation of law, the applicant, inter alia, states that Fees is not defined in GST Acts; according to Black s Dictionary, Fees is a charge fixed by law for service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3 of Notification No. 12/2017-CT dated 28.06.2017. 3. The applicant was given an opportunity to be virtually heard on 12.01.2023. Sri V. Swaminathan, Chartered Accountant, the Authorized Representative (AR) of the applicant appeared for the personal hearing and reiterated the submissions. However, when the members enquired about the investigation being conducted by DGGI, the AR stated that DGGI had collected information from the applicant and they are not aware of any case booked by DGGI. The personal hearing was continued on 16.03.2023, in physical mode, wherein the AR appeared and stated that DGGI had issued summons under Section 70 and collected information / documents. He further requested to take on record their submissions on 13.01.2023 and sought further time to submit additional grounds as to why they are eligible for advance ruling and submitted the same vide letter dated 16.03.2023 supra. 3.1 The applicant vide letter dated 16.03.2023, additional grounds, stated that Section 70 of CGST Act spells out only powers vested with the investigating officer as prescribed by Section 193 and 228 of Indian Penal Code in relation to Summons (Statement on oath and the same do not am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. 4.3 The said State authority relied on Student s Registration fee structure and various fee prescribed for processing, recognition, inspection, enhancement of seats and re-inspection fee for various courses displayed in the website of the Council to state that the Council charges fees not only from colleges affiliated, but also from the students on various aspects. Further relied on the definition of supply as per Section 7 and definition of Outward Supply as per section 2 (83) of GST Act, 2017. 4.4.1 The concerned State authority, with regard to the question of the applicant that fees collected by the Council is not for supply of goods, service or both, stated that it is clearly mentioned in their website that the Council charges various fees for the services rendered. Therefore, the services rendered should be treated as taxable services. 4.4.2 With regard to the applicant s question that fees collected does not have the character of sale, transfer, barter, exchange, license, rental lease or disposal made or agreed to be made, the concerned State authority states that as per Notification No. 11/2017 dated 28.06.2017 vide Sl. No.608 Of Annexure has specific entry 99314 Nursing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter back to the Lower Authority for consideration and passing of appropriate orders, after following the principles of natural justice. While doing so, the Appellate authority has observed in para 6.7 of the said order as follows:- 6.7. Therefore, we are of the considered opinion that the principles of natural justice have not been followed in the instant case since the advance ruling authority had erred in not sharing the documents and comments forwarded by DGGI, with the appellants. Accordingly, we are of the view that justice will be met by restoring the application for advance ruling to its original position, by way of remanding the case to the lower authority, with a direction to forward the letter dated 28.07.2022 of DGGI alongwith its enclosures, if any, to the appellant enabling them to comment on the same, and to offer them another opportunity of personal hearing before deciding the case as per the provisions of law. We further find that this authority is empowered vide Section 101 (1) of the CGST/TNGST Acts, 2017 to pass such orders as deemed fit. 6.3 Accordingly, the relevant documents were shared with the applicant and in response they furnished their comments, vide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons creates a legal fiction. This fiction establishes something which is not in existence. By inserting a deeming fiction in Section 70 (2) of the CGST Act, the power not conferred to the proper officer under the CGST Act. is given power by deeming provisions in Section 70 (2). That it is well settled, as has been observed by the Supreme Court in Bengal Immunity Company Ltd., Vs. State of Bihar (1955) SCR 603 at page 606, that legal fictions are created only for some definite purpose and these must be limited to that purpose and should not be extended beyond that legitimate field. To this effect, they have referred the case laws, viz, CIT Vs. Mother India Refrigeration Industries (P) Ltd., - SC 155 ITR 711 , and CIT Vs. Sarathy Mudaliar - 83 ITR 170, passed by the Hon ble Supreme Court of India. Further, the Telengana High Court in the case of M/s. Srico Projects Pvt. Ltd., in WP No. 26145 of 2022 has held that power to summon persons to give evidence and produce documents under Section 70 of the CGST Act, is not proceedings under this Act. PERSONAL HEARING 7. The applicant was given an opportunity to be heard on 21.08.2024, Dr. S. Sivarn Kannan, Member, TN Medical Council and Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8.4 Since the first proviso to Section 98 (2) restricts admitting application seeking advance ruling on questions which are already pending in any proceedings in the case of an applicant under any of the provisions of the Act, the term proceedings assumes immense significance in the context of the instant case. More so, because the applicant opines that the inquiry or investigation initiated by DGGI, would not fall within the ambit of the word proceedings impacting the admissibility of the original application for advance ruling filed by the appellant. 8.5 It is quite clear that the term proceedings has not been defined under the CGST Act, 2017. However, the Word proceedings is seen to have been widely used in the Act, ibid, either as it is, in the context of the situation, or with a prefix out the meaning and purpose in an unambiguous manner like Recovery proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Central tax with that of State/ Union Territory, specifies in clause (b) to sub-section 2 of Section 6 as follows :- where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. That is to say, that once a subject matter has been touched upon by a tax officer at one end (State), the tax officer at the other end (Centre), is barred from initiating any proceedings which includes inquiry or investigation through summoning or through any other procedure that precedes issue of show cause notice, if the proceedings relate to the same subject matter. 8.6.2 Section 66 of the CGST Act, 2017, that talks about Special Audit , specifies in sub-section 1 of Section 66 as follows . If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any Officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice, Sections 62, 63 and 64 on the other hand clearly discusses about the proceedings involving assessment, that precedes the issue of any show cause notice. 8.6.4 Section 70 of the CGST Act, 2017, that talks about Power to summon persons to give evidence and produce documents , specifies in sub-section 2 of Section 70 as follows:- Every such inquiry referred to in sub-section (1) shall be deemed to be judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). . From the above, it could be seen that an inquiry is deemed as judicial proceedings but within the meaning of sections 193 and 228 of Indian Penal code (IPC). In this regard, it may be seen that while Clause 193 of the IPC provides for punishment for intentionally giving false evidence, clause 228 is meant for intentional insult or interruption to public servant sitting in a judicial proceeding. The act of giving false evidence, or intentional insult or interruption to public servant, is liable for punishment under IPC as they are to be seen as offences of criminal nature. However, the commission of these offences which may take place during the inquiry or investigation arc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he context in which the terms like proceedings, inquiry, assessment, etc., have been used in the GST enactments differ from the enactments of the erstwhile era like the Excise Act, 1944, the Finance Act, 1994, etc. The same applies to the contemporary enactments like the Customs Act, the Income Tax Act, etc. Under these circumstances, we are of the opinion that any reference or reliance on any case law made by the applicant involving the enactments referred above are not comparable to the instant case involving GST, and so they do not come to their aid. Apart from the above, it may be seen that while the term any proceedings contained in the phrase in question, viz, in any proceedings in the case of the applicant under any of the provisions of this Act , by itself conveys an exhaustive picture, the additional usage of the words under any of the provisions of the Act , makes it all the more broader and all encompassing. We are therefore of the opinion that the usage of the words any proceeding in the proviso to Section 98 (2) of the CGST Act, 2017, Will encompass within its fold not just investigation, but any other proceedings as well. Accordingly, the contentions of the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling. Further in paras 12 and 13 of the said order, the Hon ble Court has observed as follows:- 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 petitioner, the registration of the petitioner institution under GST Act and its payment of tax etc. particulars, which can be said to be concerning to the provisions of the CGST/APGST Act. Therefore, it can be said that the investigation was commenced even prior to the filing of the application by the petitioner before ARA. 13. 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, we are of the view that the ARA should not have admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the details of various fees collected by the applicant from July 2017 to March 2022, and the Incident Report No. 89/2022 dated 24.06.2022 issued by the DGGI, Chennai Zonal Unit, pointing out the non-payment of taxes under GST by the applicant. Further, a Show Cause Notice No. 104/2023 dated 28.09.2023 is seen to have been issued to the applicant requiring them to show Cause as to why taxes under GST should not be demanded on the consideration received by them towards various charges/fees collected. Accordingly, it is clear that the issue involved m the investigation carried out by DGGI, Chennai Zonal Unit, and the one covered under the query for advance ruling raised by the applicant, viz., Whether GST is applicable on various Fees collected by Tamil Nadu Nurses and Midwives Council a Government Authority. is one and the same. 8.12 Further, it is seen that while the application for advance ruling in the instant case was received on 28.06.2022, the first summon issued by the Senior Intelligence Officer, DGGI, Chennai Zonal Unit is dated 12.04.2022 based on which a statement has been recorded from Dr. S. Ani Grace Kalaimathi, Registrar of Tamil Nadu Nurses and Midwives Co ..... 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