TaxTMI 
TaxTMI 
2025 (2) TMI 1089
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....y or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104 (1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it cl....
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....m, they had declared that no proceedings are pending or decided in any proceedings in the applicant's case under any of the provisions of the Act. The AAR, originally vide its order 18/ARA/2023 dated 19.06.2023 rejected the application filed by the appellant under first proviso to Section 98 (2) of the CGST Act, 2017, on the ground that summons issued u/s 70 is initiation of a proceeding under the CGST Act. 2.4. Aggrieved, the appellant preferred an appeal on 13.09.2023 vide Appeal No. 01/2023 before the Appellate Authority for Advance Ruling, Tamilnadu (AAAR), against the decision of the Order referred above. Apart from presenting the legalities involved in the grounds of appeal, the appellant inter alia highlighted the fact that the additional material submitted to AAR by DGGI, which was discussed in the impugned ruling was not brought to the notice of the Appellant. Thereby, the principles of natural justice was not followed in as much as they have not been extended an opportunity to comment on the submissions of DGGI with respect to Hon'ble Andhra Pradesh High Court order dated 23.11.2022, which states that issuance of summons under Section 70 of CGST Act, 2017, is the comme....
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....nt, appellant relied upon judgement of Hon'ble Delhi High Court in case of CIT-I Vs Authority of Advance Ruling [2020] 119 Taxmann.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 Hon'ble Supreme Court in [2017] 246 Taxman 57 (SC). b. 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. • They rely on the following judgments of the Honourable Supreme Court which clearly defines the Term "Proceedings" and distinguishes it from enquiry/summons: • The Hon'ble Supreme Court in Liberty Union Mills v. Union of India held that the term "investigation" means the process of collection of evidence or the gathering of material. It can be said that the term "Proceeding" has a larger scope than the term "investigation". It is not merely ....
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.... PERSONAL HEARING: 4.1 The first personal hearing had been scheduled on 27.12.2024. But the applicant in their letter dated 26.12.2024 has requested 15 days time to appear for personal hearing. Hence the next personal hearing had been scheduled on 09.01.2025. Shri. CA. S. Seetharaman, Partner, M/s. S Seetharaman & Associates, Chartered Accountants, appeared on 09.01.2025 for the personal hearing as an Authorised Representative (AR) of the Appellant. He reiterated the submissions made in their 'grounds of Appeal' enclosed along with the appeal application. He stated that the term 'proceedings' has not been defined in the GST Act, and that the same has been used in general with a prefix like adjudication proceedings, recovery proceedings, etc. He further argued that the issuance of summons shall not be treated as 'proceedings' as it is in the nature of an enquiry and he contended that 'proceeding' takes effect only after the issuance of Show Cause Notice as discussed in their grounds of appeal. 4.2 The AR then submitted additional written submissions dated 09.01.2025 during the hearing, wherein it was stated that on 20.12.2024, they have made a submission before the Principal ....
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....ion seeking advance ruling on questions which are already pending in any proceedings in the case of an appellant under any of the provisions of the Act, the term 'proceedings' assumes immense significance in the context of the instant case. It is quite clear that the term 'proceedings' has not been defined under the CGST Act, 2017. However, the word 'proceedings' is seen to have been widely used in the Act, ibid, either as it is, in the context of the situation, or with a prefix bringing out the meaning and purpose in an unambiguous manner like 'Recovery proceedings', 'Assessment proceedings', etc. To highlight a few, the table affixed below, brings out the picture as to when and where the term 'proceedings' has been referred to in the CGST Act, 2017, and in what context the same has been used, i.e., Section Referred as Context/ Phrase 6 (2) (b) Any proceedings Cross jurisdiction - "has initiated any proceedings on a subject matter" Proviso to 29 (1) and 29 (2) The proceedings Cancellation or Suspension - "during pendency of the proceedings relating to cancellation of registration" 66 (1) Any other proceedings Special Aud....
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.... input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.". 5.4 Apart from the above, it may be seen that while the term 'any proceedings' contained in the phrase in proviso to Section 98 (2) of the CGST Act, 2017, viz., "in any proceedings in the case of the applicant under any of the provisions of this Act", by itself conveys an exhaustive picture, the additional usage of the words 'under any of the provisions of the Act', makes it all the more broader and all encompassing. We are therefore of the opinion that the usage of the words 'any proceeding' in the proviso to Section 98 (2) of the CGST Act, 2017, will encompass within its fold all the proceedings involving scrutiny, inquiry, investigation, cancellation or suspension of registration, audit, inspection, search and seizure, assessment, adjudication, recovery, etc., as well. 5.5.1 The introduction of GST is considered a paradigm shift in the history of tax reform and the statute relating to it has been framed afresh keeping in mind the new concept of taxation embarked upon. Accordingly, the context in which the terms like proceedings, inquiry, assessment, etc.,....
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....e appellant has relied on the Judgement dated 02.12.2020 of the Hon'ble High Court of Allahabad in the case of M/s. G.K.Trading Company in Writ Tax No.666 of 2020, wherein it was held that the word "inquiry" in Section 70 is not synonymous with the word "proceedings" in Section 6 (2) (b) of the U.P.G.S.T. Act / C.G.S.T. Act. It was further held therein as follows:- "The words "any proceeding" on the same "subject-matter" used in Section 6 (2) (b) of the Act, which is subject to conditions specified in the notification issued under sub-Section (1); means any proceeding on the same cause of action and for the same dispute involving some adjudication proceedings which may include assessment proceedings, proceedings for penalties etc., proceedings for demands and recovery under Section 73 and 74 etc". Here again, it may be noted that the Hon'ble High Court has attempted to provide clarity to the term 'proceedings' as used in Section 6 (2) (b) of the CGST Act, 2017, only and not in relation to any other provisions of the Act. 5.6.1 Now we observe that there are two judgments of the Hon'ble High Court directly on the issue before us, viz., (i) Judgment dated 17.08....
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....paras 7, 11, 12 and 13 of the said judgment involving M/s. Master Minds are reproduced below, for facilitation. "7. As can be seen, the main thrust of argument of learned counsel for petitioner is that in view of the commencement of the investigation by the DGGSTI even before the submission of application by the petitioner, the ARA ought not to have admitted his application. In this regard, it is apposite to refer to section 98 of the CGST/AP GST Act, which reads thus: "98. Procedure on receipt of application:- (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the concerned officer and, if necessary, call upon him to furnish the relevant records: Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the said concerned officer. (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Autho....
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....ings in the case of an applicant under any of the provisions in the said Act. Thus, it is needless to emphasize that the first proviso puts an embargo on the authority of the ARA to admit an application. The said embargo says that where the questions raised in the application are already pending or decided by any proceedings in the case of an applicant under any of the provisions of the CGST/APGST Act, the authority shall not admit the application. The submission of the petitioner herein is that the phrase 'any proceedings' encompasses the investigation of an application under the provisions of the Act. To buttress his argument, the petitioner referred to Section 70 of the APGST Act, which reads thus: "70. Power to summon persons to give evidence and produce documents.-(1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908 (Act No. 5 of 1908). (2) Every such inquiry referred to in sub-section (1) shal....
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....umstances, considering the provisions of the statute discussed earlier in this order, we are inclined to go with the judgement of the Hon'ble High Court of Andhra Pradesh in the case of M/s. Master Minds. 5.7 At this juncture, it becomes imperative to analyse as to whether the query raised in the application for advance ruling is the same on which the investigation was initiated, and whether the investigation proceedings precedes the application for advance ruling. Accordingly, it is seen that the first summon issued by the Senior Intelligence Officer, DGGI, Chennai Zonal Unit, is dated 30.11.2022 to the Registrar, M/s. Tamil Nadu Medical Council, Chennai-106, requesting the Registrar to appear in person on 07.12.2022 to give evidence and to produce the following details/documents, viz., 1. Month-wise details of amounts collected towards the services provided by TNMC to its members and others, for the period from 01.07.2017 to 30.11.2022; 2. Ledger copies for the period from 01.07.2017 to 30.11.2022; 3. Sample invoices/receipts/copy of certificates (year wise). Subsequently, another summon dated 20.12.2022 was also seen to have been issued to the ap....