TaxTMI 
TaxTMI 
2024 (10) TMI 1378
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....ovisions of Rajasthan GST Act, 2017. The present appeal has been filed under Section 100 of the Central Goods & Service Tax Act, 2017 (hereinafter also referred to as 'the CGST Act') read with Section 100 of the Rajasthan Goods &Services Tax Act, 2017 (hereinafter also referred to as 'the RGST Act') by the Appellants against AAR, Rajasthan Ruling Order No. RAJ/AAR/2022-23/08 dated 16.06.2022. The Principal Commissioner, CGST Commissionerate, Jodhpur filed an appeal on 12.08.2022 and also submitted a request to condone the delay which is very meagre. As per them, the order of AAR was received by them on 11.08.2022. Subsequently, the Deputy Commissioner, State Tax Department, Circle, Ward - Suratgarh also filed an appeal before this authority on 14.10.2022 as admittedly the AAR Order dated 16.06.2022 was received by them only on 15.09.2022. They also requested for condonation of delay of 30 days as per proviso to sub-section (2) of Section 100 of CGST Act, 2017. BRIEF FACTS OF THE CASE 1. Shri Sunil Giri, Proprietor of M/s Giri Transport Company (hereinafter referred to as 'Respondent') having GSTIN - 08CRBPG5309NIZM, a Goods Transport Agency (GTA) was about to enter into co....
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....ontract incorporated in the body of this decision/ruling." 7. On being aggrieved with the Order dated 16.06.2022 passed by the AAR, Rajasthan, the Principal Commissioner, CGST Commissionerate Jodhpur filed an appeal before this authority on 12.08.2022 stating therein that due to late communication of AAR Order dated 16.06.2022 to them on 11.08.2022, they were unable to file the appeal against the above Order within a period of thirty days from the date of communication of the Order. They have also stated that the delay in filing of appeal is very meagre and should be condoned in view of the proviso to Section 100 (2) of the CGST Act, 2017. Subsequently, the Deputy Commissioner, State Tax Department, Suratgarh are also in appeal before us against the impugned AAR Order on 14.10.2022 showing therein date of communication of AAR Order as 15.09.2022. They also requested to extend the due date of filing of appeal by 30 days as per proviso to the Section 100 (2) of the CGST Act, 2017. Grounds of appeal for both the appeals are the same, which are reproduced as below:- 8. The appeal has been filed on the following Grounds by both the Appellants: 8.1 The Appellants have contended ....
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.... shall include "any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both"; Authority of Advance Ruling has mis-interpreted the phrase "liable to pay in relation to such supply". In case of GTA, fuel is main inward supply to execute outward supply. Irrespective of the fact that the cost is being borne by supplier or recipient, the onus of getting inward supply always lies with the supplier. 8.6 The Appellants averred that in normal course, the fuel expenses were to be borne by the Respondent but they made an agreement in which recipient would supply fuel for free. This does not spare the supplier from the liability of payment of inward supply i.e. diesel in the light of statutory provision relating to determination of value of taxable supply contained under GST Act. 8. 7 The Appellants contended that Section 15 (4) of CGST Act 2017 stipulates that "Where the value of the supply of goods or services or both cannot be determined under sub-section (1), the same shall be determined in such manner as may be prescribed....
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.... these are based on the said CBIC Circular No. 47/21/2018-GST dated 08.06.2018. 8.11 The Appellants contended that the AAR has relied upon many judgments which had been pronounced in context of service tax and therefore, are not applicable in context of GST law as: (i) In the case of Heligo Charters Pvt. Ltd, the dispute was whether the taxpayer is providing 'Business Support Service' or 'Supply of tangible goods for use without transfer of right of possession and effective control' hence has no bearing to the present case. (ii) In the case of M/s R.K. Transport Company v. CCE [2020 (11) TMI 34] CESTAT New Delhi, case laws pertain to the erstwhile service tax regime, i.e. prior to April, 2012 and not applicable in this case. (iii) The case law quoted on the basis of erstwhile service tax law is not applicable in the instant case as the provision in Section 15 (2) (b) of the CGST Act, 2017 are different from the provisions governing determination of value of taxable service contained under Section 67 of the Finance Act, 1994. According to this Section, the value of services shall be limited to the gross amount charged by the service provider for the ser....
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....therefore, no final Order could be issued by the Appellate Authority for Advance Ruling of Chhattisgarh. 8.14 The Appellants contended that the impugned Order passed by Advance Ruling Authority, Rajasthan which is prima facie, contrary to legal provisions has serious implications from view point of determination of value of taxable service as this procedure of intentionally splitting up the GTA service contract is largely used in almost all Cement Manufacturers in the country as well as various other service sectors. 8.15 The Appellants contended that the AAR in their Ruling stated that the issue is also revenue neutral in as much as even if the value of the free of cost diesel was required to be included in the value of GTA service then also the service recipient of the Respondent would be in a position to take input tax credit of the GST charged on such an invoice raised by the Respondent. The AAR findings in the context is beyond the concept of taxation as each and every B2B transaction, service receivers are taking input tax credit of the GST charged on such an invoice raised by the suppliers; and if it should be treated as revenue neutral then there should be no taxation....
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....ring, solely focused on the merits of the case and neglected to address the issue of maintainability of the appeal. The responded argued that the Deputy Commissioner, State Tax, Suratgarh Circle, who served as the jurisdictional officer at the time of the ruling by the AAR, furnished comments that contradicted the submissions furnished by them during the personal hearing dated 07.03.2024. 9.3 In response to the Respondent's request, they were intimated vide this office letter dated 19.04.2024 that neither the letters mentioned by them had been received by this office, nor were any preliminary objections filed against the appeal. They were granted the adjournment and the personal hearing was rescheduled to be held on 16.04.2024. 9.4 The Respondent vide letter dated 01.04.2024, received via email on 09.04.2024, expressed their grievance that the documents requested vide their email dated 16.03.2024 were not provided to them. They added that the documents were of utmost importance in order to file exhaustive submissions in respect of the appeals. They also stated that they have submitted preliminary objections regarding both the appeals. In this letter, the Respondent has enclos....
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....Appellant No. 2 and Sh. Sanjay Jhanwar, Sr Advocate, Sh. Rahul Lakhwani, Advocate and Sh. Ashish Sharma (authorized representatives of the Respondent). In the personal hearing, the Assistant Commissioner, State Tax iterated the written submissions already made by them and further relied upon an Order dated 17.10.2023 of the Hon'ble Chhattisgarh High Court (writ petition No. 117/2022) in the case of M/s Shri Jeet Transport v/s UOI and others in a similar issue wherein the diesel cost has been held to be includible in the taxable value. 9.6 The counsels for the Respondent supplied two written submissions dated 07.05.2024 (one each for the Centre and the State). They submitted that they had four preliminary objections for appeal filed by CGST and four for appeal filed by SGST. Three of the objections were common for both the appeals and are reproduced as below: 1. That the time limit for passing order u/s 101 of the CGST Act 2017 stands expired. 2. That the Appeal has been filed without following the procedure as prescribed by law. 3. That the Appeal filed by the Appellant Department is time barred. One objection each was specific to the CGST appeal and f....
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....espondent argued that the appeals were filed by Appellants No. 1 and 2 on 12.08.2022 and 14.10.2022 respectively, and over 1.5 years have passed since then. They asserted that the deadline for issuing an order under Section 101 (2) of the CGST Act has expired, rendering the appeal orders ineligible, thus affirming the finality of the Advance Ruling Order. II. THAT THE APPEALS FILED BY THE APPELLANT DEPARTMENTS ARE TIME BARRED. A. The Respondent submitted that the Appellant No. 1 filed the appeal on 12.08.2022 in respect of impugned order dated 16.06.2022 while Appellant No. 2 filed the appeal on 14.10.2022 B. The Respondent contended that Section 100 (2) provides that the appeal before the Appellate Authority of Advance Ruling has to be filed within a period of 30 days from the date of communication of order to the Appellant. They added that it also provides that the time limit can be further extended to another 30 days on sufficient cause being shown. Sub-section (2) of Section 100 of CGST Act, 2017 provides as follows - 100. Appeal to Appellate Authority. (2) Every appeal under this Section shall be filed within a period of thirty days from the date on ....
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....he Appellants being barred by limitation is liable to be rejected. III. THAT THE APPEALS WERE FILED WITHOUT FOLLOWING THE PROCEDURE AS PRESCRIBED UNDER THE LAW. A. The Respondent submitted that as per Section 100 (3) appeal shall be in such form, accompanied by such fee and verified in such manner as may be prescribed. B. They referred to Rule 106 of the CGST Rules, 2017 which reads as under: Rule 106. Form and manner of appeal to the Appellate Authority for Advance Ruling.- (1) An appeal against the Advance Ruling issued under sub-section (6) of Section 98 shall be made by an applicant on the common portal in FORM GST ARA-02 and shall be accompanied by a fee of ten thousand rupees to be deposited in the manner specified in Section 49. (2) An appeal against the Advance Ruling issued under sub-section (6) of Section 98 shall be made by the concerned officer or the jurisdictional officer referred to in Section 100 on the common portal in FORM GST ARA-03 and no fee shall be payable by the said officer for filing the appeal. (3) The appeal referred to in sub-rule (1) or sub-rule (2), the verification contained therein and all the relevant do....
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....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: Provided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant: Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. (3) A copy of every order made under sub-section (2) shall be sent to the applicant and to the concerned officer. (4) Where an application is admitted under sub-section (2), the Authority shall, after examining such further material as may be placed before it by the applicant or obtained by the Authority and after providing an opportunity of being heard to the applicant or his authorised representative as well as to the concerned officer or his authorised representative, pronounce its advance ruling on the question specified in the application. (5) Where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and ....
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.... the Applicant for the transportation. the parties have clear understanding that the said diesel shall be used/consumed exclusively for the transportation of goods belonging to the customer and that the property in the diesel will not pass to the Applicant. The freight for the transportation is fixed based on the scope of transportation contract, which excludes diesel. In the light of the above arrangement. while undertaking the activity of transportation of the vendor's goods under this agreement, the truck placed by applicant would be, filled up with the diesel for the said trip. The said agreement is always for transportation to specific destinations only. The Applicant would be neither required to nor would be liable to pay for the diesel that would be filled in the trucks by the said customer. As far as the Applicant is concerned the Applicant will be required to send the trucks to the customer's destination. The trucks will report to the factory and after loading of goods, diesel calculated on the basis of load and distance, for the transportation of the said consignment to the destination, will be filled in the fuel tank of the truck. 6. On examination of t....
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....rder passed by AAR, Rajasthan is an 'Consensus ad Ordinem' and Appellant is bound by the 'Principle of Estoppel'. The Appellant in the garb of appeal remedy is attempting to revisit the stand taken before the authority of Advance Ruling which is bad in law and liable to be rejected. 12. In light of the facts and submissions made hereinabove, the Respondent requested that the AAAR may decide the preliminary objections raised vide different communications made by the Respondent. Further they prayed that the following recourse may be taken: i. Not to proceed with the Appeal as the time limit for passing the order as per Section 101 of the CGST Act has expired and declare the ruling given by the Authority of Advance Ruling vide order dated 16.06.2022 as final; and or ii. Reject the appeal declaring it to be barred by limitation; and/or iii. Dismiss the appeal being filed without following the procedure prescribed under the law; and iv. If proceeding further in the matter on merits, then a sufficient opportunity to submit reply on merits may please be provided. 13. The Joint Commissioner, State Tax, Suratgarh vide letter dated 08.05.2024 made an....
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.....10.2024 which was within the stipulated time for filing the appeal against an Advance Ruling. With regard to contention of the Respondent that the impugned Order was uploaded on 17.06.2022 on GST Portal, they submitted that this order was not reflecting/showing in their ID hence could not be treated as communicated. DISCUSSION AND FINDINGS 15. We have carefully considered the material evidence and facts available on record including the oral submissions and additional written submissions made by the Appellant No. 2 during the hearings dated 07.03.2024 and 07.05.2024. We have also taken into account the submissions made by authorized representatives of the Respondent at the time of personal hearing dated 07.05.2024. We observe that the Authority of Advance Ruling, Rajasthan ('AAR') vide Advance Ruling No. RAJ/AAR/2022-23/08 dated 16th June, 2022 pronounced Ruling that "the value of diesel filled free of cost (FOC) by the service recipient is not includable in the value of the GTA service proposed to be provided by the Applicant (GTA) in the facts and circumstances of the present application subject to conditions as mentioned in draft Transport Service Agreement/ contract i....
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....de the preliminary objections as and when they were filed before further proceedings in the matter. 19. In view of the directions given by Hon'ble Rajasthan High Court, Jodhpur, we proceed to examine & decide the preliminary objections first. Written submissions to preliminary objections 20. We note that the respondent has titled the preliminary objections as "written submissions in respect of preliminary objections raised on behalf of Mis Sunil Giri". From what has been stated in the detailed submissions it transpires that they are claiming that "the Respondent has already filed preliminary objections to the appeal filed by the Appellant through the communications dated 29.08.2022, 29.09.2022, 27.10.2022 and 08.03.2024 whereby it was requested to provide certain information/documents which have not been provided and therefore, the present written submission to preliminary objection is subject to information/ documents to be provided to him." 21. We note that the Respondent has sought detailed correspondences by which the captioned appeals, being barred by limitation and lapsed, has been revived including the provisions of law vide which the same can be revived. We note....
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....eal under section 100 or a reference under sub-section (5) of section 98. (3) Where the members of the Appellate Authority differ on any point or points referred to in appeal or reference, it shall be deemed that no advance ruling can be issued in respect of the question under the appeal or reference. (4) A copy of the advance ruling pronounced by the Appellate Authority duly signed by the Members and certified in such manner as may be prescribed shall be sent to the applicant, the concerned officer, the jurisdictional officer and to the Authority after such pronouncement. 22.2 Upon reading the subsection 2 above, we note that the law provides a right to the appellant for timely disposal of the appeal filed by them. We also note that in law, the meaning of 'shall' cannot always be construed to be as mandatory or something that must be done. It can also be considered to convey the meaning as 'may' based on the context in which it is being used. Thus we need to look into the context and the scheme of law. In the instant case, the intention of the law according to the subsection 2 of the Section 101 of the CGST Act 2017 is to accord a right to the appellant to ....
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....guage in a particular section, clause or sentence is directory or mandatory. The word "shall", though prima facie gives impression of being mandatory character, it requires to be considered in the light of the intention of the legislature by carefully attending to the scope of the statute, its nature ad design and the consequences that would flow from the construction thereof one way or the other. In that behalf, the Court is required to keep in view the impact on the profession, necessity of its compliance; whether the statute, if it is avoided, provided for any contingency for non-compliance; if the word "shall" is construed as having mandatory character, the mischief that would ensue by such construction; whether the public convenience would be subserved or public inconvenience or the general inconvenience that may ensue if it is held mandatory and all other relevant circumstances are required to be taken into consideration in construing whether the provision would be mandatory or directly. If an object to the enactment is defeated by holding the same directory, it should be construed as mandatory whereas if by holding it mandatory serious general inconvenience will be created t....
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....ticle 320, the Apex Court observed, ".... the use of the word "shall" in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect..." * In Khub Chand v. State of Rajasthan, the Hon'ble Supreme Court held: "Doubtless, under certain circumstances, the expression "shall" is construed as "may". The term "shall" in its ordinary significance is mandatory ... unless such an interpretation leads to some absurd or inconvenient consequences.....'' 22.2.5 We also find it appropriate in the instant case to refer to the judgment of Hon'ble SC in case of Smt. Bachahan Devi & Anr vs Nagar Nigam, Gorakhpur & Anr on 5 February, 2008, in which it was held: 28. The use of the words `shall' in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding would be invalid....." 29. Words are the skin of the language. The language is the medium of expressing the intention and the object that ....
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.... injustice which may result in treating the provision one way or the other, the relation of the provision to other consideration which may arise on the facts of any particular case, have all to be taken into account in arriving at the conclusion whether the provision is mandatory or directory. Two main considerations for regarding a rule as directory are: (i) absence of any provision for the contingency of any particular rule not being complied with or followed, and (ii) serious general inconvenience and prejudice to the general public would result if the act in question is declared invalid for non-compliance with the particular rule. In view of the above discussion, we hold that the word 'shall' in Section 101 of the CGST Act has to be interpreted in an advisory way. Any other interpretation shall have the effect of denying the right of appeal to taxpayers & stake holders which is not the scheme/intention of law. It will be interpreted to convey that the AAAR shall endeavour to pass the order in 90 days. Therefore, the argument of expiry of time limit for passing an order is hereby rejected as a preliminary objection as well as an objection to the grounds of a....
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.... been filed by them on 12.08.2022 and 14.10.2022. Still the Appellants requested that extension of one month for filing of appeal may be granted to them in terms of proviso to Section 100 (2) of the CGST Act, 2017 which provides: "Provided that the Appellate Authority may, if it is satisfied that the Appellant was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days." 23.4 We observe that the Respondent disputed the dates of receipt of the impugned ruling in the respective offices of the Appellants 1 and 2. The Respondent claimed that as per the information available on the website of "India Post", the speed post parcels sent by the office of the AAR were delivered to the addressee on 23.06.2022 and 28.06.2022 respectively and that the order was also uploaded on the common portal on 17.06.2022 itself. 23.5 In this regard, vide letters dated 31.05.2024, the details of receipt of the impugned Order were enquired from both the Appellants id est the Commissioner, CGST & CX/ST, Jodhpur and the Joint Commissioner, State Tax, Suratgarh. 23.5.1 We note t....
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....30 days, accordingly, we hold that the appeal was filed within time prescribed, hence not time barred. 23.6 We, therefore, hold that the appeals filed by the Appellants are well within the period of limitation are not barred by it as provided under proviso to Section 100 (2) or Section 100 (2) of the CGST Act, 2017. Consequently, the preliminary objection to this effect raised by the Respondent is liable for rejection and is hereby rejected. Third objection-Procedure not followed 24. The Respondent argued that the appeals have been filed by the Appellants in hard copy which is contrary to the express requirements of Section 100 (3) of the CGST Act, 2017 read with Rule 106 (2) of the CGST Rules, 2017 as the same require that the appeal must be filed by the concerned officer or the jurisdictional officer referred to in Section 100 on the common portal in FORM GST ARA-03. 24.1 In this regard we note that the facility of filing appeals online on the common portal is a measure of trade facilitation and ease of doing business. It not only saves time and money of the appellant and obviates the need for physical visit to the offices but also helps automatic digitization of case....
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.... applicant aggrieved by any Advance Ruling pronounced under sub-section (4) of Section 98, may appeal to the Appellate Authority. 25.2 From perusal of the said provisions of Section 100 ibid we find that the terms 'concerned officer' and 'jurisdictional officer' have been used for referring to two different persons who are distinct from each other and nowhere does the sub-section give an impression that concerned officer and jurisdictional officer can be one and the same authority of State GST or Central GST. 25.3 Further we find it pertinent to refer to the provisions governing forwarding of a copy of the Advance Ruling as contained in Section 98 of the CGST Act, 2017 wherein the said terms have been employed as follows: "(7) A copy of the Advance Ruling pronounced by the Authority duly signed by the members and certified in such manner as may be prescribed shall be sent to the applicant, the concerned officer and the jurisdictional officer after such pronouncement." 25.4 From the above provisions also we note that the terms 'concerned officer' and 'jurisdictional officer' have been employed to denote two different authorities and the sub-section (7) of Section 9....
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....t to be appealed against is communicated to the concerned officer, the jurisdictional officer and the applicant: Provided that the Appellate Authority may, if it is satisfied that the Appellant was prevented by a sufficient cause from presenting the appeal within the said period of thirty days, allow it to be presented within a further period not exceeding thirty days. (3) Every appeal under this Section shall be in such form, accompanied by such fee and verified in such manner as may be prescribed." 26.2 From perusal of the provisions of Section 100 of the CGST Act, 2017, we find it evident that they do not provide for any restrictions so far as the grounds of appeal are concerned. We note that so long as the 'jurisdictional officer' or "the concerned officer" is aggrieved by the Advance Ruling pronounced under Section 98 (4), he may prefer an appeal to the Appellate Authority. 26.3 In the instant case we note that the 'Jurisdictional Officer" i.e. the State GST authority has raised serious objections as regards the applicability of the CBIC's circular and of various judgments referred to by the Advance Ruling Authority and contested the Advance Ruling main....
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....d taken by the Deputy Commissioner, State Tax, Circle Suratgarh, had implication for the whole state of Rajasthan. As such approval of higher officers was required before submitting the comments to AAR. Later on, the matter came to the notice of higher officers and it was felt that the stand taken by the Deputy Commissioner, State Tax, Circle Suratgarh, was not correct, legal and proper. Consequently, it was decided to file appeal in the matter and appeal was filed accordingly. 26.6 It is a settled position of law that there is no estoppel against the State and no estoppel against Statute implying that the rule of estoppel does not operate in the instant case. At the same time, we find that as a principle "Only a competent person's promise can operate as estoppel" A representation can operate to create promissory estoppel only if it was within the competence of the promise-maker to make good such representation. In case the Central Board of Excise and Customs or Central Government makes such promise, their promise would operate as estoppel only if they are competent to make good such promise [U.O.I. v. Godfrey Phillips - 1985 (22) E.L.T. 306 (S.C.) = 1985 (4) SCC 369]. A l....