2023 (5) TMI 288 - HC - GST

Registered service recipient seeking advance ruling on upfront lease premium exemption under Notification 12/2017; rejection set aside, remanded.

The dominant issue was whether a registered recipient of services has locus standi to seek an advance ruling under the CGST Act, 2017. The HC held that ... Definition of 'applicant' under Section 95(c) of the Central Goods and Services Tax Act, 2017 - maintenance of application before Authority for Advance Ruling - scope of Section 97(2)(b) - advance ruling on applicability of an exemption notification - locus standi to seek advance ruling - remand for decision on merits by Authority for Advance RulingDefinition of 'applicant' under Section 95(c) of the Central Goods and Services Tax Act, 2017 - locus standi to seek advance ruling - scope of Section 97(2)(b) - advance ruling on applicability of an exemption notification - The appellants, being registered persons, had locus to file an application before the AAR and their application fell within the scope of matters on which an advance ruling could be sought under the Act. - HELD THAT: - The Court examined the statutory definition of 'applicant' in Section 95(c) and held that it is framed broadly to include any person registered or desirous of obtaining registration under the Act. The appellants were registered persons; accordingly they fell within that definition. The subject-matter of the appellants' application related to the applicability of an exemption notification and therefore came within clause (b) of Section 97(2). On these statutory foundations the AAR erred in rejecting the application on the ground of lack of locus standi rather than entertaining and deciding it on merits. [Paras 3, 4, 5, 6]Application before the AAR could not be rejected for want of locus standi and the appellants were entitled to have the application considered on merits.Remand for decision on merits by Authority for Advance Ruling - maintenance of application before Authority for Advance Ruling - The appropriate remedy was to set aside the AAR's order rejecting the application for lack of locus standi and to remit the matter to the AAR for adjudication on merits in accordance with law. - HELD THAT: - Having found that the appellants were entitled to apply to the AAR and that the subject-matter fell within Section 97(2)(b), the Court set aside the AAR's order and remanded the matter to the West Bengal Authority for Advance Ruling with a direction to decide the application on merits and in accordance with law. The Court clarified that this direction was issued having regard to the facts and circumstances of the case on hand. [Paras 7, 8]Order of the AAR dated 9th February, 2023 is set aside and the matter is remanded to the AAR for fresh decision on merits.Final Conclusion: Appeal allowed; impugned order of the AAR rejecting the advance ruling application for want of locus standi set aside and the matter remitted to the West Bengal Authority for Advance Ruling to decide the application on merits and in accordance with law; no order as to costs. Issues involved: The appeal challenges the rejection of an application for an advance ruling by the West Bengal Authority for Advance Ruling, Goods and Services Tax, on the grounds of locus standi.Summary:Issue 1 - Locus Standi for Filing Advance Ruling Application:The appellants challenged the rejection of their application for an advance ruling by the AAR based on the grounds of locus standi. The Court noted that under the Central Goods and Services Tax Act, 2017, the term 'applicant' is defined broadly to include any person registered or desirous of obtaining registration under the Act. As the appellants were registered under the Act, they fell within the definition of 'applicant.' The Court emphasized that the AAR should have considered the application on its merits rather than rejecting it based on lack of locus standi.Issue 2 - Interpretation of 'Applicant' under the Act:The Court referred to a previous case where it was held that the Act defines 'applicant' to include any person registered under the Act. Even though the appellants were not parties to the proceedings before the AAR, being registered dealers under the Act, they were considered as falling within the definition of 'applicant' as per Section 95(c) of the Act.Judgment:The Court allowed the appeal and set aside the order of the AAR rejecting the application. The matter was remanded back to the West Bengal Authority for Advance Ruling to decide the application on its merits and in accordance with the law. The Court clarified that the decision was based on the specific circumstances of the case. No costs were awarded, and urgent copies of the order were to be provided to the parties upon completion of legal formalities.This judgment highlights the importance of considering applications for advance rulings on their merits rather than dismissing them solely based on procedural grounds like locus standi.