2025 (2) TMI 779 - AAR - GST

AAR rejects advance ruling application on GST search procedures citing inadmissibility under section 98(2)

The AAR Rajasthan rejected an advance ruling application regarding GST search procedures, including whether searches can be conducted outside specified ... Withdrawal of Advance Ruling application - GST Search can be conducted other than the place specified in the Search warrant or not - cash or valuables can be seized by the department from the place other than specified and authenticated in the search warrant or not - cash and goods pertaining to the person other than the assessee can be seized by the Department or not - confiscation of cash seized - HELD THAT:- The applicant has not raised any questions which are found to be covered under any of the clauses of sub-section (2) of section 97 of the GST Act. It is satisfied that the applicant has been provided reasonable opportunity to counter the observations. Therefore, there are no reason to accept the instant application made by the applicant for pronouncement of ruling. The application is, therefore, rejected on this ground alone. In terms of first proviso of sub section (2) of section 98 of the GST Act “the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act”. Here, found that as the matter has already been decided by Assistant Commissioner, CGST division-J, Ajmer vide Order in Original No. 14/GCM/GST/DIV-I/2024-25/AC dated 11.06.2024. Therefore, the application filled by the applicant is not fit to accept for pronouncement of ruling. The application is liable to be rejected, hence, rejected. Since the ruling authority has not found any reason to accept the application for pronouncement of ruling as above and the applicant has also requested for withdrawal of the application, therefore, their request to withdraw the application is considered. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include:1. Whether the GST search can be conducted at a location other than the one specified in the search warrant.2. The legality of seizing cash or valuables from a location not specified in the search warrant.3. Whether cash and goods belonging to individuals other than the assessee can be seized by the department.4. Whether cash can be classified as goods under the GST Act and subsequently confiscated.5. The legality of seizing and confiscating goods belonging to individuals other than the assessee.6. Whether penalties and demands can be imposed on individuals other than the assessee.7. The correctness of seizing and confiscating cash explained and documented by the owner, yet not released.8. Whether goods belonging to others, kept at the assessee's place, can be deemed as belonging to the assessee.9. The legality of seizing cash from the assessee's home and the home of relatives.10. Whether cash seized from different premises can be combined and assessed in the hands of the assessee.11. The legitimacy of ignoring affidavits and requests, leading to the confiscation of goods and cash belonging to others in the hands of the assessee.ISSUE-WISE DETAILED ANALYSIS1. Search and Seizure LegalityThe applicant questioned the legality of conducting a search and seizing items from locations not specified in the search warrant. The relevant legal framework includes Section 67 of the CGST Act, which governs search and seizure operations. The applicant argued that the search at the uncle's premises was unauthorized as it was not specified in the warrant. The Court did not provide a ruling on this issue due to the withdrawal of the application and the matter being previously adjudicated.2. Classification of Cash as GoodsThe applicant contended that cash does not fall under the definition of goods as per Section 2(52) of the CGST Act and referenced a Delhi High Court judgment supporting this view. The Court did not address this issue substantively because the application was withdrawn, and the matter was already decided by another authority.3. Seizure of Third-Party Goods and CashThe applicant challenged the seizure of goods and cash belonging to third parties, arguing that it was unjustified. The legal framework involves Section 67(2) of the CGST Act, which allows seizure if goods are believed to be liable for confiscation. The Court did not rule on this issue due to the withdrawal of the application and prior adjudication.4. Imposition of Penalties on Non-AssesseesThe applicant questioned the imposition of penalties on individuals other than the assessee. The relevant legal provisions include Section 122 of the CGST Act, which outlines offenses and penalties. The Court did not provide a determination on this issue due to the withdrawal of the application and existing adjudication.5. Treatment of Affidavits and ExplanationsThe applicant argued that the department ignored affidavits and explanations regarding the ownership of cash and goods. The legal framework involves procedural fairness and the duty to consider evidence. The Court did not address this issue substantively due to the withdrawal and prior decision.SIGNIFICANT HOLDINGSThe Court did not make any significant holdings or establish new legal principles as the application for advance ruling was withdrawn by the applicant. The withdrawal was based on the realization that the issues raised were already adjudicated by the Assistant Commissioner, CGST Division-J, Ajmer, and the applicant intended to pursue an appeal instead.The Court noted that the questions raised did not fall under the purview of Section 97(2) of the GST Act, which specifies the scope of advance rulings. Additionally, the Court acknowledged the applicant's request to withdraw the application due to technical issues with filing an appeal on the GST portal, which has since been resolved.Ultimately, the application for advance ruling was dismissed, and no ruling was provided on the substantive issues due to the withdrawal and prior adjudication of the matters involved.