Tej Jain Vs Chief Commissioner of CGST (Rajasthan High Court)
The Hon’ble Rajasthan High Court in Tej Jain v. Chief Commissioner of CGST & Anr. [Civil Writ Petition No. 12624/2022, order dated May 30, 2025] held that the observations on Input Tax Credit (“ITC”) in para 6.8 of the Order passed by the Appellate Authority for Advance Ruling (“AAAR”) were to be expunged given the fact that the question pertaining to ITC was not originally dealt with by the Authority for Advance Ruling (“AAR”) and hence the AAAR had travelled beyond the grounds of challenge in the appeal.
Facts:
Tej Jain (“the Petitioner”), engaged in the business of purchase and sale of old and used motor vehicles, filed an application before the AAR seeking clarification on whether the cost incurred on refurbishment and the amount paid to the car owner would be included in the purchase price so as to compute the margin for the purposes of valuation and levy under Notification No. 08/2018 – Central Tax (Rate) dated January 25, 2018.
The AAR answered the question in negative in its order dated August 27, 2021. The Petitioner appealed, but the AAAR upheld the ruling of the AAR in its order dated December 14, 2021. However, in para 6.8 of the Order passed by the AAAR, the AAAR made certain observations on the eligibility of ITC when opting for the margin scheme under the above Notification No. 08/2018 – Central Tax (Rate) dated January 25, 2018, clarifying that the benefit of the notification is optional and ITC can only be claimed if the Petitioner does not wish to avail the benefit provided by Notification No. 08/2018 – Central Tax (Rate) dated January 25, 2018.
