Srico Projects Ruling Voided for Concealing Material Facts Under CGST Section 104(1)

AAR of Telangana invalidated an advance ruling for Srico Projects Pvt Ltd due to material fact suppression. The ruling was declared void ab initio under Section 104(1) of CGST Act after discovering an ongoing DGGI investigation regarding GST rate discrepancies. The applicant failed to disclose an existing investigation during the advance ruling process, leading to automatic nullification of the ruling.

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Issues involved:
The issues involved in the judgment are the validity of an Advance Ruling obtained by suppression of material facts and the application of Section 98(2) of the CGST/TGST Act, 2017 in rejecting an application.

Validity of Advance Ruling:
The Authority for Advance Ruling of Telangana State found that the applicant, M/s. Srico Projects Pvt Ltd, had raised a question in an Advance Ruling application that was already pending before the Directorate General of GST Intelligence, Hyderabad Zonal Unit. The Authority opined that the applicant obtained the Advance Ruling by suppressing this material fact, leading to the ruling being declared as void ab initio under Section 104(1) of the CGST Act, 2017. A notice was issued to the applicant for a personal hearing, but they failed to attend, resulting in the Order being declared void.

Application of Section 98(2) of the CGST/TGST Act, 2017:
The investigation on M/s. Srico Projects Pvt. Ltd. was initiated by the DGGI on 15/12/2021 for adopting a GST rate of 12% instead of 18% for certain works contract services. This issue was raised in the Advance Ruling application dated 24.06.2022, which was submitted after the investigation had commenced. The Authority for Advance Ruling found that the applicant had not disclosed this fact at any stage of the proceedings, leading to the ruling being obtained by suppression of material facts. Consequently, the Order issued in reference was declared as void ab initio under Section 104(1) of the CGST/TGST Act, 2017.

Conclusion:
In light of the above discussion, the Order issued in the reference was declared as void ab initio under Section 104(1) of the CGST/TGST Act, 2017. This decision implies that all provisions of the Act or rules made thereunder shall apply to the applicant as if the Advance Ruling had never been made.

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