AAAR rejects advance ruling application on GST liability due to pending audit proceedings under Section 65

The AAAR rejected an advance ruling application filed by the applicant regarding GST liability on stamp duty and registration fees for mining lease deed registration. The authority held that the application was inadmissible under Section 98(2) of CGST Act, 2017, as the same subject matter was already pending in audit proceedings under Section 65. The Additional Commissioner had issued DRC-01 demanding Rs. 6,27,74,106/- under Section 73. Relying on Madras HC precedent in ABT Limited case, the AAAR concluded that audit proceedings constitute valid proceedings under CGST Act, making the advance ruling application non-maintainable.

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Issues:
1. Appeal against Advance Ruling under CGST Act and OGST Act regarding GST levied on stamp duty and registration fees for lease deed.
2. Admissibility of appeal application before Appellate Authority for Advance Ruling.
3. Validity of audit proceedings and applicability of CGST Act provisions.

Detailed Analysis:
1. The appeal was filed by an Applicant engaged in "Mining and Supply" of Iron Ore against an Advance Ruling order regarding the GST levied on stamp duty and registration fees paid for a lease deed. The Applicant sought clarification on the applicability of GST on these fees and whether the Nil rate of tax exemption applied. The AAR considered the case and noted the Applicant's argument against tax on tax and the statutory nature of stamp duty. The AAR rejected the application, citing the proviso to Section 98(2) of the CGST Act, as the matter was already pending in audit proceedings.

2. The Applicant, aggrieved by the AAR's ruling, filed an appeal before the Appellate Authority for Advance Ruling under Section 100 of the CGST Act, seeking to set aside the ruling and requesting a personal hearing. During the personal hearing, the Applicant's representative reiterated their submissions and argued that the audit process was not a proceeding under the GST Act. However, the Appellate Authority upheld the AAR's decision, stating that the appeal was not maintainable under the law due to the pending audit proceedings and the proviso to Section 98(2) of the CGST Act.

3. The Appellate Authority analyzed the case, considering the Applicant's submissions, the proviso of Section 98(2) of the CGST Act, and the audit proceedings initiated by the Audit Commissionerate. Referring to Section 65(7) of the CGST Act, the Authority highlighted that the audit could lead to action under Sections 73 or 74 for tax discrepancies. Citing a judgment from the Madras High Court, the Authority affirmed the validity of the audit as a proceeding under the CGST Act and concluded that the appeal against the Advance Ruling was not maintainable. Therefore, the application was rejected under Section 98(2) of the CGST Act.

This detailed analysis outlines the legal proceedings and decisions regarding the appeal against the Advance Ruling, emphasizing the significance of audit proceedings and the proviso to Section 98(2) of the CGST Act in determining the admissibility of the appeal before the Appellate Authority for Advance Ruling.

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