The Andhra Pradesh High Court (HC) has held that an advance ruling application should not be accepted by Advance Ruling Authority (ARA) when the investigation started before the application was filed.
The Petitioner submitted that even by the date of filing of the application before ARA on 15.12.2020, the GST has already cancelled the registration under the GST Act of the petitioner and further the Director General of Goods and Services Tax Intelligence ( ‘DGGSTI’), Visakhapatnam, had called for certain documents and enquired about the payment of GST on the services provided by the petitioner.
It was observed that in Appellate Authority for Advance Ruling, Karnataka’s case, the appellate authority for ARA, Karnataka was inter alia considering the argument of the department that the respondent/applicant therein suppressed the factum of investigation that has been initiated by the DGGSTI under the CGST Act and its filing incidental report dated 17.01.2019 and obtained the ruling from authority for an advance ruling by keeping the said authority in darkness and the said ruling was invalid and void ab initio.
A two-member bench comprising Justice U Durga Prasad Rao and Justice T Mallikarjuna Rao observed that any proceedings referred to in 98(2) proviso encompasses within it the investigation against the applicant as per the provisions of CGST/APGST Act and if by the date of filing of the application before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling.
Further, the Court held that “when the investigation has already commenced before the filing of the application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98.” The Court set aside the Order.
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