TaxTMI 
TaxTMI 
2022 (11) TMI 208
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....stions for advance ruling in the application for Advance Ruling dated 02.12.2020 filed by it.- "Whether the medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment for patients opting with or without packages along with allied services i.e. (room rent/food/doctor fees etc.) provided by hospital would be considered as Composite Supply' and accordingly eligible for exemption under the category "Health Care Services "?" 3.2 The Gujarat Authority for Advance Ruling (herein after referred to as 'the GAAR'), vide Advance Ruling No. GUJ/GAAR/R/11/2021 dated 20.01.2021, ruled as follows:- "The medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment for patient opting with or without packages along with allied services i.e. (room rent/food/doctor fees etc.) provided by hospital is a "Composite Supply ". Supply of inpatient health care services by the applicant hospital as defined in Para 2(zg) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, is exempted from CGST as per Sl.No. 74 of the above notifi....
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.....com 80 (Delhi HC) and the case of Sage Publication Ltd Vs Deputy Commissioner of Income Tax (International Taxation) reported at [2016] 387 ITR 437 (Delhi), which was later affirmed by the Supreme Court in [2017] 246 Taxman 57 (SC). 5.3 The term 'Proceedings' only includes any proceedings that may result in a decision i.e. show cause notice or order and cannot include mere inquiry or investigation initiated by investigation agencies as Show Cause Notice is the point of commencement of any proceeding as per Master Circular No. 1053/02/2017-CX dated 10.03.2017 issued by CBIC. 5.4 In absence of Show Cause Notice till date, no proceeding can be said to be pending before any authority and there is no suppression of material facts. 5.5 The issue on which ruling is give in their case is no more res integra and same has been ruled by a catena of rulings relied upon by appellant. 5.6 If department is aggrieved by ruling, it could have filed appeal before appellate authority and by not filing appeal against the said ruling, it is unfair, illegal and unwarranted on the part of the department to raise the issue under pretext of pending proceedings before GAAR. 6. The Gujarat Auth....
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....ted way back on 04.06.2019, in respect of which no show cause notice was issued prior to the date of application for advance ruling and this fact shows that no proceedings were pending in appellant's case under any provisions of CGST Act and thus there is no mis declaration on the part of appellant. (ii) The advance ruling is pronounced on 20.01.2021 and hence proviso to Section 98(2) should not be applicable as that section requires that the authority shall not admit the application where the question raised in application is already pending or decided in any proceedings in case of an applicant under any provisions of this Act. Pronouncement of rulings implies that their application has been admitted after examining the application and records in terms of Section 98(2) and hence the question raised in the application was not reported to be pending or decided in any proceedings. (iii) According to appellant's bona fide belief, proviso of Section 98(2) of CGST Act will be attracted only when a show cause notice is issued or order is passed on the question sought and in appellant's case, the matter was only under inquiry and investigation and no show cause notice was ....
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.... that Section 73(8) and 74(8) of CGST Act states that "all proceedings in respect of the said notice shall be deemed to be concluded on payment of sum specified therein "which supports that the show cause notice is starting point of any proceedings. (vi) The appellant submitted that there is no allegation of suppression/mis declaration of fact in the letter dated 06.03.2021 issued by Additional Commissioner, State Tax and notice dated 09.06.2021 issued by GAAR for fixing in personal hearing and in impugned ruling. 7.2 The appellant submitted that ex-facie arrival at a decision is unreasonable. When application is filed, the revenue did not raise the issue of mis-statement or brought to the notice of GAAR that any proceedings are pending in case of the appellant. When application was admitted and ruling is pronounced, it is not open to GAAR to allege misstatement or presume proceedings to be pending when Section 98(2) of CGST Act states that authority shall not admit the application where question raised is already pending or decided in any proceedings under CGST Act. 7.3 The appellant submitted that they requested the GAAR to provide them copies of all communications and releva....
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....the tax ascertained by department and advising them to pay the tax along with applicable interest and penalty. (iii) Appellant submitted application for advance ruling on 02.12.2020 for which GAAR pronounced ruling dated 20.01.2021 answering the question raised by appellant. (iv) On 22.01.2021, appellant submitted the ruling dated 20.01.2021 to Assistant Commissioner of State Tax, Enforcement & Co-ordination, Gujarat State, Ahmedabad. (v) On 08.03.2021, the GAAR received a letter F.No. CST/ENFORCEMENT/ SHALBY/AD VANCE RULING/20-21/O.NO.5376 dated 06.03.2021 from the Additional Commissioner of State Tax (Enforcement), Gujarat State, Ahmedabad, informing about the proceedings initiated against the appellant before the appellant had filed application before GAAR. (v) On 09.06.2021, the GAAR issued letter to the appellant intimating them about the personal hearing scheduled on 15.06.2021 to decide whether ruling dated 20.01.2021 is required to be declared void ab-initio under section 104 of CGST Act. (vi) The GAAR vide ruling dated 19.07.2021 declared its previous ruling dated 20.01.2021 void ab-initio in terms of Section 104 of CGST Act, 2017. 12. From the above, it is ampl....
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....x evasion. The objective of investigation is to carry out in depth analysis of taxpayer's transactions, activities and records to ensure that tax due to government exchequer is not lost in evasion. Therefore, initiation of investigation can be said to be the start of proceedings to safeguard government revenue. Further the appellant was also issued with Form GST DRC-01A Part A which was intimation of liability, under the provisions of Section 74(5), to pay GST in terms of the proceedings initiated against the appellant. We are therefore of view that the use of words 'any proceedings' in proviso to Section 98(2) of CGST Act will encompass the investigation initiated against the appellant and also notice of intimation of tax liability issued to them. 16. Appellant has relied upon various judgments/case laws in support of their contention that commencement of investigation cannot be considered as jurisdictional bar on Advance Ruling authority. On examination of those judgments with reference to the facts of present case, we are of view that that, case laws relied by appellant are not applicable due to following reasons: CIT-1 (International Taxations) Vs Authority of Ad....
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....age Publication Ltd Vs Deputy Commissioner of Income Tax (International Taxation) [2016 (387) ITR 437 (Delhi)] This is relied upon by Delhi High Court while rendering judgment in case of CIT Vs AAR, therefore, this case is not applicable in present case as discussed in previous para. M/s G K Trading Company Vs UOI [2021 TIOL 31 HC ALL GST] The facts of the case are UPGST (State Tax) initiated an investigation against the petitioner under Section 70 of UP GST Act and thereafter, DGGI, Meerut also initiated inquiry against the petitioner through issuance of summons under Section 70 of CGST Act. The petitioner contended that once inquiry has been initiated by State Tax. DGGI cannot initiate any proceedings against them in view of Section 6(2)(b) of UP GST Act, 2017. In above case, Allahabad High Court inter alia held that "the word 'inquiry in Section 70 has a special connotation and a specific purpose to summon any person whose attendance may be considered necessary by the proper officer either to give evidence or to produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensue upon the making of the inquiry or con....
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....arting point of any legal proceedings against the party." Further, it is clarified in para 2.1 that the show cause notice is basic document for settlement of any tax or initiation of any punitive action for recovery of tax evaded by contravention of provisions of Central Excise Act or rules made there under. Furthermore, we find that above referred circular is issued in Central Excise Regime when there was no concept of issuance of form GST DRC-01A. The concept of issuance of GST DRC-01A has been introduced after implementation of GST. Therefore the referred circular is not relevant under the GST law. 18. The appellant has further contended that there is no allegation of suppression/mis-declaration of fact in the letter dated 06.03.2021 issued by Additional Commissioner of State Tax and notice dated 09.06.2021 issued by GAAR for fixing the personal hearing and in the impugned ruling. After going through the both above letters referred by the appellant, we find that in the letter dated 06.03.2021 issued by Additional Commissioner, of State Tax to the GAAR, it is clearly mentioned that proceeding is already pending in the given case before application is filed to advance ruling auth....
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....oceedings are pending against the appellant either when the application was admitted and before the ruling is pronounced, it is not open to GAAR to allege mis-statement or presume proceedings to be pending when Section 98(2) of CGST Act states that authority shall not admit the application where question raised is already pending or decided in any proceedings under CGST Act. It is admitted fact that State Tax Department brought to the notice of the GAAR that the advance ruling has been obtained by suppression of material facts and therefore, the GAAR took cognizance of this information placed before it and pronounced the ruling dated 19.07.2021. It is trite law that when one comes for justice one should come with clean hands. The appellant has indeed not revealed the fact of proceedings/investigation pending against them before the State Tax department on the same issue which was sought in application for advance ruling. 21. We find that the appellant in their application for advance ruling made before the GAAR had at Para 17 of Form GST ARA-01 had ticked on both the options thereby declaring that the question raised in the application is not already pending in any proceedings in ....