TaxTMI 
TaxTMI 
2019 (12) TMI 1331
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....No. GST-ARA-23/2018-19/B-87 dated 10.08.2018 = 2018 (12) TMI 227 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, which was disposed of vide AAAR Order No. MAH/AAAR/SS-RJ/26/2018-19 dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA. However, the Appellant filed the application under section 102 of the CGST Act, 2017 on 23.08.2019 for the rectification of the ruling dated 22.03.2019, issued by AAAR on the following grounds: (i) It was alleged by the Appellant that the Appellate Authority for the Advance Ruling had committed an error of law, apparent on the face of record, in as much as while disposing the case, it had not applied its mind to the provisions of law, which gives it a jurisdiction to act in a particular manner. To support their contention, they drew analogy between the provisions laid out in section 102 of the CGST Act, 2017 governing the rectification of the advance ruling and the provisions of the Review Power enumerated in Order XLVII of the Civil Procedure Code 1908 by placing emphasis on the similar phraseologies i.e. "any error apparent on the face of record" used in section 102 of the CGST Act, 2017 and "mistake or err....
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....has no jurisdiction' to give any opinion or verdict, because it lacked the basic jurisdiction to 'determine place of supply" under section 97(2) of the CGST Act, 2017. (ii) They further alleged that the Appellate Authority had also /failed to appreciate the ramification of the CBIC Circular No. 107/29/2019 -GST dated 18.07.2019, which clarifies the issues relating to the "intermediary services" in as much as the definition of intermediary inter alia provided specific exclusion of a person i.e. that of a person who supplies such goods or services or both or securities on his own account. Therefore, the supplier of services would not be treated as "intermediary" even where the supplier of services qualifies to be an agent/broker or any other person, if he is involved in the supply of services on his own account. They further pleaded that had the Appellate Authority considered and applied the aforesaid Board Circular, then the self-evident answer would have emerged, wherein the Appellant, though an "intermediary" was covered by specific exclusion of a person i.e. that of a person who supplies such goods or services or both or securities on his own account as per the clarifica....
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....sons, personal hearing in the matter was conducted on 20.11.2019, which was attended by Shri D.P. Bhave, Advocate on behalf of the Appellant, wherein he reiterated the aforesaid submissions, as well as made additional submissions during the personal hearing, which was on the same line as that of the aforesaid submissions except the submissions on the determination of the jurisdiction with respect to the questions asked by the Appellant in their advance ruling application. To corroborate their claim as to the Appellant Authority had the jurisdiction to decide even the place of supply of the goods or services or both, for the purpose of the determination of the liability to pay tax on any goods or services or both as laid out under section 97(2)(e) of the CGST Act, they cited a Supreme Court Judgment in the case of Smt. Ujjam Bai Vs. State of U.P., pronounced on 10.04.1962 = 1962 (4) TMI 90 - SUPREME COURT. The Appellant, further, requested to file additional submissions in this regard, which we agreed to. Subsequently, the Appellant filed the additional submissions on 27.11.2019, and subsequently on 06.12.2019 as well and requested to pass the final order after due consideration of ....
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....o know, in advance, its liability to tax". • In its message to all Taxpayers, through FAQ, the Board had declared in loud and clear terms the above object in these words: "To conclude, it can be stated that the law makes a comprehensive provision for Advance Rulings to ensure that disputes are minimal....... The aim is to provide certainty to the tax payer with respect to his obligations under the GST Act and an expeditious ruling, so that the relationship between the tax payer and administration is smooth and transparent and helps to avoid unnecessary litigation". • The abortive Order dated 22-03-2019 did exactly the opposite!! 6. In the end: (a) It was submitted that it was perfectly lawful for this Honorable Appellate Authority to correct the order already passed based on the law declared by the High Court/Supreme Court, on a date subsequent to the date of the passing of the order, because the law so declared is always retrospective in effect from the date the statutory provision existed. (b) On parity of reasoning, a clarificatory binding circular issued under section 168 (1) of the CGST Act,2017, is also having retr....
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....ares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence, any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicata, or accounts that have been settled in the meantime." (iii) Hon'ble Punjab and Haryana High Court have in the case of Commissioner of Income Tax vs. Smt. Aruna Luthra [2001] 170 CTR 0073 (P&H) = 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT held as under: "A Court decides a dispute between the parties. The cause can involve decision on facts. It can also involve a decision on a point of law. Both may have bearing on the ultimate result of the case. When a Court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of the promulgation of the law. The declaration is - This was the law. This is the law. This is how the provision shall be construed." (iv) In this ....
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....be consistent with the Circular which was in force at the relevant point of time - In this context, it is relevant to note that the Circular dated 18th July 2019, expressly states that various representations were received expressing "doubts" and hence the clarification is being given as to the true purport of the term "intermediary" and "intermediary services". Obviously, the Circular is clarificatory in nature and shall apply retrospectively". • The settled law is as follows: • In Zile Singh v. State of Haryana and Ors. [2004 (8) SCC] = 2004 (10) TMI 553 - SUPREME COURT the Honorable Supreme Court held: The presumption against retrospective operation is not applicable to declaratory statutes .In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operatio....
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.... across field formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and Services Tax Act, 2017, hereby withdraws, ab-initio Circular No. 107/26/2019-GST dated 18.07.2019." UNQUOTE: 13. In these circumstances, the Applicant /Appellant most respectfully submit and urge: (a) That the impugned Circular dated 4th December 2019 has to be construed as "operating prospective", that is, from 04-12-2019 and "NOT retrospectively" as stated: "hereby withdraws, ab-initio Circular No. 107/26/2019-GST dated 18.07.2019. (b) That the Section 168(1) of the CGST Act does not confer on the Board any "legislative power like farming Rules or Regulations", but admittedly and ex-facie the power to be exercised is "administrative/executive" in nature: "to ensure uniformity in the implementation of the provisions of the law across field formations", an Administrative duty or function. (c) That the Rajasthan High Court, in Gopi Krishna vs. State of Rajasthan on 6 February, 1987, (1987 WLN UC 276) succinctly stated: QUOTE: 17. A distinction is to be drawn between administrative/executive order or circular and the rules framed in exercise o....
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....¢ In conclusion: It is submitted that the "withdrawal" of Circular dated 18th July 2019, will be effective ONLY ON AND FROM 4th December 2019, and NOT 'ab initio' FROM 18th July 2019, in view of the settled law, as discussed herein above. 14. The abovesaid personal hearing was also attended by Shri T.N. Godse, Asstt. Commr. of State Tax in the capacity of the Jurisdictional Officer, wherein he filed and reiterated the written submissions, which is being reproduced herein under: 15. "Intermediary" in simple terms is explained as a firm or a person who acts as a link between parties for conducting business. Applicant is providing services as Intermediary. 16. As per section 2(13) of the IGST act 2017 "Intermediary" means a broker, an agent or any other person by whatever name called, who arranges or facilitates the supply of goods or services or both or securities between two or more persons, but does not include a person supplies such goods or services or both or securities on his own account. 17. From above we find that "Intermediary" means a broker, an agent or any other person who arranges or facilitates the supply of goods or services or both between two ....
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.... of such intermediary issues. The applicant promotes the courses of foreign universities among prospective students. It receives consideration in convertible foreign exchange. Applicant represents the university in the territory of India and acts as its recruitment agent and held as intermediary services and not export of services. 25. Question no 2: if the answer is in the negative whether the impugned supply of service forming part of cross border sale/purchase of goods will be treated as an "intra-state supply" under section 8(1) of the /GST Act read with section 2(65) of the MGST Act attracting CGST/MGST? And if so what rate? 26. It would be necessary to discuss interstate provisions as well as intrastate provisions under the GST laws: 27. Section 7 of the Integrated Goods and Service Tax Act 2017 covers the interstate provisions. As no specific provisions are applicable for determining tax rate, residuary provision under section 7(5)(c) shall be made applicable in the case of Intermediary service. This section states that interstate supply of goods or services or both in the taxable territory shall be treated to be a supply of goods or services or both in the course o....
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....r both within the meaning that term. 31. On perusal of the provisions it is seen that the place of supply has not been covered in the questions raised by the applicant. Hence his application of rectification under section 102 cannot be maintained and to be rejected for want of jurisdiction. Discussions and Findings 32. Heard both the parties. We have also perused the submissions and documents placed before us. The limited issue before us was to ascertain whether there is any error which is apparent on the face of the record i.e. the impugned AAAR Order dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA as envisaged under section 102 of the CGST Act, 2017. 33. In order to buttress their submissions as to the AAAR Order dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA does have apparent errors on the face of the record, first, the Appellant drew analogy between the provisions laid out in section 102 of the CGST Act, 2017 governing the rectification of the advance ruling and the provisions of the Review Power provided in Order XLVII of the Civil Procedure Code 1908 by placing emphasis on the si....
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....ces invariably requires the determination of the place of supply of services, which is not specified among the list of questions/issues, provided under section 97(2) of the CGST Act, 2017, on which advance ruling is sought under the GST Act, the advance ruling on the said question cannot be given. In view of this, we did not go into the details of the nature of services being rendered by the Appellant to their clients, as the same was not considered relevant in the context of the question asked by the Appellant. Hence, we did not find worth in discussing the issue as to whether the Appellant's services would fall under the ambit of the intermediary services as defined under section 2(13) of the IGST Act, 2017 or not. Hence, the allegation levelled by the Appellant as to the Appellate Authority had not applied its mind to true purport of the expression "intermediary services" is without merit, and therefore, not sustainable 36. As regards the Appellant's contention that the subject issue raised by the them regarding the determination of the export of service would be covered under section 97(2)(e) of the CGST Act, 2017, we would like to examine the aforesaid provision, which is b....
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.... for one may not be one for another. It is mostly subjective and dividing line in border areas is thin and indiscernible. It is something which is a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 154, it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The plain meaning of the word 'apparent' is that it must be something which appears to be so ex facie and it is incapable of argument or debate...." In Sir Hari Shankar pal and Another Vs. Anath Nath Mitter and others [1949 FCR 36] = 1949 (1) TMI 8 - FEDERAL COURT, a Five Judges Bench of the Federal Court (predecessor Court to the Supreme Court), while considering the question whether the Calcutta High Court was justified in not granting relief to non-appealing party, whose position was similar to that of the successful appellant, held : "That a decision is erroneous in law is certainly no ground for ordering review. If the Court h....