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TMI Blog2024 (10) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 bringing out the meaning and purpose in an unambiguous manner like Recovery proceedings , Assessment proceedings , etc. The term proceedings used in the CGST Act, 2017 is not restricted to proceedings which commence after the issue of show cause notice alone, and that the same also denotes proceedings prior to the issue of show cause notice, or proceedings which may not culminate in the issue of any show cause notice at all. Accordingly, the notion of the applicant that the process relating to commencement of inquiry/investigation under summon procedure do not get covered the category of the term proceedings , under the CGST Act, 2017, is misconceived and misplaced, for the reason that apart from such judicial proceedings , even the other relating to assessment, audit, detention/ seizure/ release of goods and conveyance which may or may not entail any issue of show cause notice, are also treated as proceedings under the CGST Act, 2017. Investigation is activated when there is enough predication to show that there is an alleged tax evasion and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In terms of Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. 4. Advance Ruling obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts. shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore. unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the Same provisions under the Tamil Nadu Goods and Service Tax Act. 1. The applicant submitted a copy of challan dated 30.12.2022 evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.1 Tamil Nadu Medical Council (in short Applicant ) previously known as Madras Medical Council was constituted under the Madras Medical Registration Act IV of 1914 by the Local Legislature. It caters to the regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails u/s Section 67 of CGST Act and that the Applicant also received Summons u/s 70 of CGST Act. Further, when the Members raised question of suppression of the said information in AAR application during the personal hearing, it was stated by the applicant 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 amount to proceedings under CGST Act. Proceedings is not defined in CGST Act and in the absence of statutory definition, it shall be accorded literal interpretation. The fact that the term proceeding adjudication proceedings and investigation has been used separately and not interchangeably in the CGST Act suggests that the term proceeding does not include investigation and inquiry within its ambit. 3.2 The applicant further relied on the judgment of Hon ble Supreme Court in the case of Liberty Union Mills Vs Union of India and Radha Krishna Industries vs State of Himachal Pradesh and Ors to distinguish proceedings from enquiry / summons. They also relied on the judgment of Hon ble Allahabad High Court in the case of GK. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, either State or Central. 4.2 The concerned State authority, with regard to the question of the applicant that Whether GST is applicable on various fees collected by Tamil Nadu Medical Council, a Government Authority has stated that Tamil Nadu Medical Council is not a Service provider or doing any business activities, and therefore, GST is not applicable for various fees collected by Tamil Nadu Medical Council, a State Government Authority. 4.3 The jurisdictional authority of Center , has neither furnished their comments on the question raised by the applicant nor informed about any pending proceeding against the applicant on the question raised. 5. The applicant, after consent, was given an opportunity to be heard in person on 16.03.2023. Sri, V. Swaminathan, Chartered Accountant, the Authorized Representative (AR) of the applicant appeared for the Personal hearing and reiterated the submissions. However, members asked about the investigation being conducted by DGGI vide Summons dated 30.11.2022 and 20.12.2022 and -suppression of the said information in the Advance Ruling Application. The AR admitted receipt of Summons before filing Advance Ruling Application on 05.01.2023 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 03.04.2023 of DGGI alongwith its enclosures, if any, to the appellant enabling them to comment on the same, and io offer them another opportunity of personal hearing before deciding the case as per the provisions of law. We farther find that this authority is empowered vide Section 101 (1) of the CGST/TNGST Acts, 2017 to pass such orders as deemed fit. 6.4 Accordingly, the relevant documents were shared the applicant. and in response they furnished their comments, vide their letter dated 23.02.2024, in which the following points were highlighted, viz., Judicial proceedings referred to in Section 70 of the CGST Act, does not mean any proceedings as referred to in Section 98 (2) of the CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. 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 Telangana 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. V. Swaminathan Chartered Accountant and the authorized representative (AR) of the applicant, appeared for the personal hearing. The AR reiterated Che submissions made in their application. They stated that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 bringing out the meaning and purpose in an unambiguous manner like Recovery proceedings , Assessment proceedings , etc. 8.6 To highlight a few, the table affixed below, brings out the picture as to when and where the term proceedings has been referred to in the CGST Act, 2017, and in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rritory 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 availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ancillary in nature, as against the case of GST tax evasion which is the main offence in question. Therefore from the above, it becomes clear that an inquiry is to be seen as initiation of judicial proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 in the additional submissions filed by them through their letter dated 23.02.2024 is of no avail to them. 8.8 in this regard, we find that the applicant has relied on the following case laws that merit consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows:- 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 admitted the application in the instant case and issued its ruling. Therefore, the said order dated 05.03.2020 is vitiated by law. This fact was brought to the notice of the appellate authority in the grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuing Medical Education Certificate Import fees for the period from 01.07.2017 to 30,11.2022, in response to the summons dated 30.11.2022, and (ii) a statement dated 09.01.2023 has been recorded from Shri Dr. R. Shanmugam, Registrar of TNMC, wherein he has explained about the various fees collected by TNMC , and the reason as to why GST was not paid on the fees collected. Accordingly, it is clear that the issue involved in 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 Medical Council (TNTC) 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 filed by the applicant online on 30.12.2022, the first summon issued by the Senior Intelligence Officer, DGGI, Chennai Zonal Unit is dated 30.11.2022 for appearance on 07.12.2022. It is seen that the date of issue of the second summon is 20.12.2022 for appearance on 09.01.2023. It is quite clear from the above, that the initiation of proceedings by way of issue of both the summons that seeks the d ..... 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