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Case Law Details

Case Name : In re West Bengal Highway Development Corporation Limited (GST AAR West Bengal)
Appeal Number : Order No. 30/WBAAR/2023-24
Date of Judgement/Order : 31/01/2024
Related Assessment Year :

In re West Bengal Highway Development Corporation Limited (GST AAR West Bengal)

The process of obtaining an advance ruling under the Goods and Services Tax (GST) regime is crucial for taxpayers seeking clarity on tax liabilities concerning their transactions. However, the application’s fate hinges on the adherence to procedural requirements, as illustrated by the case of West Bengal Highway Development Corporation Limited (WBHDCL). This article delves into the reasons behind the rejection of WBHDCL’s advance ruling application by the Authority for Advance Ruling (AAR), West Bengal, offering key insights into the importance of framing specific questions when seeking an advance ruling.

Procedural Background:

The Central Goods and Services Tax Act, 2017 (CGST Act), and the West Bengal Goods and Services Tax Act, 2017 (WBGST Act), establish a framework for seeking advance rulings on matters related to the supply of goods or services. Applicants must submit their questions through FORM GST ARA-01 on the common portal. The purpose is to obtain a decision on tax matters related to ongoing or proposed transactions.

Critical Lapse in Application Process:

In the case of WBHDCL, the critical lapse was the absence of a specific question in the application form. Despite submitting an annexure alongside the application, WBHDCL failed to articulate any questions for which an advance ruling was sought. Instead, the annexure contained a statement on “Auditors’ comments on Emphasis of Matter in Independent Auditors’ Report for Financial Year 2021-2022 and Management Reply against the comment thereto.” This oversight led to the application’s rejection, as the AAR could not ascertain the specific issues or questions requiring a ruling.

Implications of the Rejection:

The rejection of WBHDCL’s application underscores the procedural rigor enforced by the AAR. The absence of a clear question negates the application’s purpose, rendering the AAR unable to provide a ruling. It highlights the importance of meticulously preparing the application, ensuring that it explicitly states the questions or issues on which an advance ruling is sought. This precision is vital for the AAR to assess the application’s merits and render a decision that provides the applicant with the necessary tax clarity.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BENGAL 

1.1 At the outset, we would like to make it clear that the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression GST Act‟ would mean the CGST Act and the WBGST Act both.

1.2 In terms of clause (a) of section 95 of the GST Act, an advance ruling means a decision provided by this authority or the appellate authority, as the case may be, on matters or any questions specified in sub section (2) of section 97 or sub section (1) of section 100 of the GST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. An application for obtaining an advance ruling is to be made on the common portal in FORM GST ARA-01.

1.3 However, in the instant case, no question is found to have been raised by the applicant against the specified column of the application in FORM GST ARA-01. The applicant has enclosed an annexure with the application. The applicant, even in the said document so annexed, has not stated any questions on which the advance ruling is sought. The said document is found to be a statement on “Auditors‟ comments on Emphasis of Matter in Independent Auditors‟ Report for Financial Year 2021-2022 and Management Reply against the comment thereto.”

1.4 The aforesaid fact was brought to the notice of the authorised representative of the applicant in course of personal hearing which has not been refuted.

1.5 In the light of above, we are of the view that there cannot be any reason to admit the application. The application, therefore, is rejected.

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