TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 552
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (for short-'appellant') against the Advance Ruling No. GUJ/GAAR/R/2024/04 dated 3.2.2024. 3. Briefly, the appellant who is engaged in the manufacture and supply of toys made up of plastic and/or rubber or both, approached the GAAR [Gujarat Authority for Advance Ruling] seeking a ruling on the below mentioned questions viz "[a] What is the appropriate classification & rate of GST applicable on supply of plastic toys under CGST & SGST? [b] Can the applicant claim ITC in relation to CGST-IGST separately in debit notes issued by the supplier in the current financial year i.e. 2020-21, towards the transactions for the period 2018-19" 4. GAAR, post admittance & personal hearing, pronounced its ruling vide Advance Ruling No. GUJ/GAAR/R/10/2021 dated 20.1.2021 wherein it was held as under: Answer to [a]: The classification of the product 'Plastic toys' manufactured and supplied by the applicant M/s. I-tech Plast India Pvt. Ltd., Survey No.108-109, Bhavnagar-Rajkot Highway, Shampara, Bhavnagar (as per the First Schedule to the Customs Tariff Act, 1975(51 of 1975) as well as the corresponding rate of GST (as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 (as amende....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that [a] the proceedings were pending against the applicant and [b] that these facts were not disclosed to the GAAR. 8. Aggrieved, the appellant is before the GAAAR [Gujarat Appellate Authority for Advance Ruling], raising the following averments, a) that the appellant had time and again requested for reply/response of DGGSTI, Pune or other authority, which was never supplied; that in this connection they would like to rely on the case of Kanwar Natwar Singh Manu/SC/795/2010; b) that DGGSTI in the incident report uses the word 'investigation' & 'primary scrutiny' and not 'proceedings; c) that the present case, is an investigation which has not culminated into proceedings; d) that merely because the appellant decided to pay the differential tax of 6%, it does not mean that the proceedings were pending; e) that the GAAR has avoided/missed para 13 of their communication dated 14.10.2020, wherein the appellant has clearly conveyed that it is in the process to analyse the correct classification; f) that SGST, in their communication to GAAR has informed that proceedings could be said to have been initiated only when SCN is issued and the investigation by DGGSTI could not be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eration & by no means of imagination, it can fall under the category of question pending consideration; s) that the appellant feels that the action of DGGI was not required to be disclosed before the GAAR & therefore it should be treated as a Bonafide belief & matter of legal interpretation; t) that DGGI Pune has no jurisdiction to conduct inquiry. 9. Personal hearing in the matter was held on 25.6.2025, wherein Shri Tushar Hemani, Sr Advocate along with Shri Nishant Shukla, Advocate appeared on behalf of the appellant. Shri Tushar Hemani, Sr Advocate, took the authority through the appeal papers and reiterated the submissions made in the appeal. During the course of the personal hearing, they submitted the following documents viz a) Synopsis containing dates and events and the copies of the case laws, and ruling relied upon by the appellant; b) A compilation consisting of the following judgements/rulings viz (i) Radha Krishan Industries [2021] 127 taxmann.com 26 (SC)] (ii) Liberty Oil Mills [1984] 3 SCC 465] (iii) Smita and Sons Coal Pvt. Ltd. [2023] 147 taxmann.com 141 (Gujarat)] (iv) G. K. Trading Company [2021] 126 taxmann.com 211 (Allahabad)] (v) Kaish Impex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctions 98 and 104, of the CGST Act, 2017, viz [relevant extracts] Section 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 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: 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 spe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar Hemani, Sr. Advocate, during the course of personal hearing, relying on sections 66, 98(2), 104 and 151, ibid, informed that the word scrutiny/inquiry, investigation, proceedings, have different connotations. He further stressed that there was no proceedings either pending or decided when the appellant preferred the application before GAAR and that this being the factual matrix, they were not legally bound to inform the sequence of events leading to payment of differential duty to the Authority. 17. In the interregnum, DGGSTI, Pune, has issued SCN No. DGGI/Int/Intl/76/2020-Gr.B-O/o-ADG-DGGI-ZU-Pune dated 28.6.2024, demanding IGST amount of Rs. 2.52 crores for the period 7/2017 to 3/2019 under section 73(1) of the CGST Act, 2017 read with section 20 of the IGST Act, 2017 invoking the provisions of explanation of section 104 of the CGST Act, 2017. The SCN also notes the following: 7.2 M/s I -Tech vide letter dated 15.04.2024 (RUD-5) submitted following details: - i. They have paid differential GST of Rs. 2,19,50,311/- along with interest of Rs. 40.87.542/- for the period F.Y. 2019-20 vide Debit Entry No. DC2410200116140 dated 14.10.2020 and differential GST of Rs. 94,61,677/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....process to analyse the correct classification. The non-disclosure is to the GAAR and not to DGGSTI. The averment that since they had conveyed that they are in process of analyzing the classification to DGGSTI Pune, it tantamounts to disclosure before GAAR is not a plausible argument and does not absolve the appellant from not disclosing these facts to the GAAR. 23. The appellant has further stated that even the SGST, in their communication to GAAR had informed that proceedings could be said to have been initiated only when SCN is issued and the investigation by DGGI could not be equated with proceedings. The view does not appear to be correct when examined with the facts of the matter. Even otherwise, the view/opinion of the SGST officer, is not binding on the Authority. 24. An averment has also been raised questioning the jurisdiction of DGGSTI Pune to conduct the inquiry. While jurisdiction does not figure amongst the seven issues listed in section 97(2), ibid, on which rulings can be sought, we still deem it appropriate to hold that the averment made is not legally tenable since notification No. 14/2017-CT dated 1.7.2017, grants all India jurisdiction to the officers of DGGSTI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty in the instant case, were never disclosed in their application dated 30.11.2020. Subsequently, on 18.12.2020, the applicant also discharged their tax liability with interest, for the period April, 2020 to September, 2020. This was much before the Advance Ruling authority passed it's ruling on 20.01.2021. All these facts, intricately related to the issue to be decided by the Advance Ruling Authority in the instant case, were required to be disclosed by the applicant. However, they manifestly failed to do so. Hence, we are of the considered opinion that they have failed to cross the bar of Section 104 of CGST Act, 2017, as they have withheld crucial information from the Advance Ruling authority. 27. The appellant has relied upon a plethora of case laws to substantiate his averments viz 1 M/s. G.K. Trading Company [2021 (51) GSTL 288 (All). The Hon'ble Court was dealing with the meaning of the words inquiry under section 70 and the word proceeding as appearing in section 6(2)(b), ibid. 2 Liberty Oil Mills AIR 1984 SC 1271 The Hon'ble Supreme Court in this case explains the word investigation, to mean no more than the process of collection of evidence or gathering of mate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lso relates to provisional attachment under section 83. The present dispute is not relating to provisional attachment. The reliance therefore on this case is not tenable. 11 Rais Khan [2024] 160 taxmann.com 546 (Rajasthan)] The Hon'ble Court was dealing with the meaning of the words inquiry under section 70 and the word proceeding as appearing in section 6(2)(b), ibid. 12 Sage Publications Ltd. U.K. [2016] 73 taxmann.com 85 (Delhi)] The case pertains to Advance Ruling under the Income Tax Act wherein the Hon'ble Court held that issuance of notice under section 143(2) of the Income Tax Act would be insufficient to attract automatic rejection. 13 Sage Publications Ltd. U.K. [2017] 79 taxmann.com 118 (SC)] The case pertains to Advance Ruling under the Income Tax Act wherein the Hon'ble Court held that issuance of notice under section 143(2) of the Income Tax Act would be insufficient to attract automatic rejection. 14 CIT vs. AAR-[2020] 119 taxmann.com 80 (Delhi) This matter also pertains to Advance Ruling under the Income Tax Act and therefore the reliance is not tenable. 15 K. Prabhakaran VS. P. Jayarajan - [2005] 1 SCC 754 The case law is a judgement in res....