No immunity from GST Inquiry merely because AAR application was filed before initiation of GST investigation: AAR

M/s. Srico Projects Private Limited, 178/A, Srico, Road No.12, MLA Colony, Banjara Hills, Hyderabad, Telangana, 500034 (36AAGCS7109F1ZD) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.

The Company, are works contract executing civil works for Central Government Employees Welfare Housing Organization (CGEWHO) and have applied for advance ruling in order to obtain clarification regarding rate of tax on works executed for the Government. Hence, this application for Advance Ruling.

It is observed by the members of the authority that DGGI, Hyderabad Zonal Division has initiated an enquiry into the business activities of the applicant and also issued a notice to them on 15-12-2021 and therefore their case falls under the first proviso to Sec 98(2) of the CGST Act, 2017 wherein their application is liable to be rejected as the question raised by them in the application is pending or decided in such proceedings before the DGGI.

The first proviso under Section 98(2) reads as follows:

“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 provisions of this Act”.

Thus if the question raised is pending or decided in any proceedings pertaining to the applicant the authority shall refuse to admit such application.

The latest amendment to the sub-Section 1 of Section 83 of CGST Act’ 2017 vide Act-13 of Finance Act 2021 as expanded the meaning of proceeding to Chapter-XIV of the CGST Act, 2017 which includes “Inspection, Search & Seizure”.

It is well settled law of interpretation that where the legislature uses the same expression in the same statute at two or more places, then the same interpretation should be given to that expression. Thus, generally the same words are used with the same meaning throughout the same statute; otherwise it would cause injustice. This principle of interpretation was upheld by the Hon’ble Supreme Court of India in a catena of case law starting from Raghubansh Narain Vs Govt. of UP AIR 1967 SC 465 and the latest being Sher Singh Vs State of Haryana (2015) 3 SCC 724. Therefore in view of the amendment to Section 83(1) the expression ‘proceedings’ will have the same meaning for Chapter XIV as the other chapters mentioned in the CGST Act, 2017.

In the present case as the DGGI, Hyderabad has even issued a notice for payment of tax before the above hearing was held for disposal of the question raised before AAR. Merely because the application before the AAR was filed earlier to the investigation initiated by DGGI they will not be immune from any inquiry.

Thus as the proceedings are pending under Chapter-XIV of the CGST Act, 2017 regarding the question raised by the applicant, their application stands rejected.