Case Law Details

Case Name : M/S Sdb Diamond Bourse Vs Union Of India (Gujarat High Court)
Appeal Number : R/SPECIAL CIVIL APPLICATION NO. 3457 of 2020
Date of Judgement/Order : 27/01/2021
Related Assessment Year :

M/S Sdb Diamond Bourse Vs Union Of India (Gujarat High Court)

Mr.Vyas is right to a certain extent that the issues raised by the writ­ applicants before the ARA have been gone into by the Commissioner in the Order in Original. In other words, the Authority, in its order dated 16th July 2020, has adjudicated upon both the issues. In such circumstances, for all purposes, the application before the ARA has become academic and we should ask the Appellate Tribunal to hear the appeal preferred by the writ­ applicants herein and decide the same expeditiously in accordance with law.

We do not undermine the importance of Chapter­ XVII as pointed out by the Supreme Court. A vibrant system of advance ruling can go a long way in reducing the taxation litigations. However, in the matters of the present type, sometimes the delay at the end of the ARA may frustrate the investigation which may not be in the interest of the Revenue.

In the aforesaid view of the matter, we have reached to the conclusion that we should not interfere with the impugned order passed by the Commissioner only on the ground that he should have waited for the ruling of the ARA. Thus, in the peculiar facts and circumstances of the case, we decline to grant any relief to the writ­ applicants and relegate them to pursue the appeal preferred by them, before the Tribunal. The Tribunal shall decide the appeal expeditiously in accordance with law without being influenced in any manner with any of the observations made by this Court in this order. The Civil Application also stands disposed of.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. By this writ­application under Article 226 of the Constitution of India, the writ­applicant has prayed for the following reliefs :

“…that this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to :

(a) quash the impugned SCN issued by the Respondent No.4 in its entirety;

(b)     Pending admission, hearing and till final disposal of this petition, Your Lordships may be pleased to direct :

(i) the Respondent No.5 to hear the application on merits and dispose the same as early as possible;

(ii) the Respondent Nos.3 and 4 not to take any coercive steps to recover any undue and unascertained amount of Service Tax, Interest and Penalty by way of issue of any order;

(iii) stay the impugned SCN issued by the Respondent No.4 in its entirely;

(iv) the Respondent No.4 to release a refund of excess payment of Service Tax paid by the Petitioner No.1;

(c)  any other and further relief deemed just and proper be granted in the interest ofjustice;

(d) to provide for the cost of this petition.”

2. It appears that during the pendency of the present writ­ application, the impugned show ­cause notice dated 22nd October 2019 issued by the respondent no.4 culminated in a final order passed by the Commissioner, Central Excise and CGST, Surat. The operative part of the final order reads thus :

29. In view of the above discussions and findings, I hereby pass following orders :

(i) I confirm the demand of Service Tax totally amounting to Rs.24,67,98,056/­ (Rupees Twenty Four Crore Sixty Seven Lakh Ninety Eight Thousand Fifty Six only) from M/s SDB Diamond Bourse, Surat under proviso to sub­section (1) of Section 73 of the Finance Act, 1994. Further, I appropriate Service Tax amounting to Rs.24,67,98,056/­ from amount already paid by them as mentioned in the show­cause notice;

(ii) I confirm and order for recovery interest at the applicable rate on delayed payment of service tax as found payable by M/s SDB as mentioned at (i) above, from M/s SDB Diamond Bourse, Surat, under Section 75 of the Finance Act, 1994, as amended.

(iii) I impose a penalty of Rs.24,67,98,056/­ (Rupees Twenty Four Crore Sixty Seven Lakh Ninety Eight Thousand Fifty Six only) on M/s SDB Diamond Bourse, Surat under Section 78(1) of Finance Act, 1994, as amended;

(iv) I impose a penalty of Rs.10,000/­ (Rupees Ten Thousand only) on M/s SDB Diamond Bourse, Surat, under Section 77(1) of the Finance Act, 1994 as amended for failure to obtain Service Tax Registration;

(v) I impose a penalty of Rs.10,000/­ (Rupees Ten Thousand only) on M/s SDB Diamond Bourse, Surat, under Section 77(1) of the Finance Act, 1994 as amended for failure to file ST­3 returns during 2014­15.

(vi) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Mathurbhai Madhabhai Savani, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(vii) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Manubhai Davariya, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(viii) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Govindbhai Laljibhai Dholakia, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(ix) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Asitbhai Vasantlal Mehta, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(x) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Vallabhbhai Shamjibhai Patel, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(xi) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Laljibhai Tulsibhai Patel, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

(xii) I impose a penalty of Rs.1,00,000/­ (Rupees One Lakh only) on Shri Jitubhai Babulal Shah, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended;

30. As in this case service tax has already been appropriated, if interest for delayed payment of service tax is paid within 30 days of the date of receipt of this order, the penalty payable under section 78 shall be 25% of service tax as confirmed at 29(i) above if such reduced penalty is also paid within 30 days of receipt of this order.

31. This Order is passed without prejudice to any other action that may be taken against them under the Finance Act, 1994 and the rules framed thereunder or under any other law for the time being in force.”

3. As the final order came to be passed confirming the demand of service tax with imposition of penalty, the Civil Application came to be filed with the following prayers :

“A. Your Lordships may be pleased to allow this application;

B. Your Lordships may be pleased to quash the impugned order dated 16.07.2020;

C. Pending admission, hearing and final disposal of Special Civil Application No.3457 of 2020, Your Lordships may be pleased :

i. To stay order dated 16.07.2020 issued by respondent no.6.

D. Your Lordships may be pleased to grant such other and furthe relief/s that may deemed fit and proper in the facts and circumstances of the case;”

4. A Coordinate Bench of this Court passed the following order dated 21st October 2020 :

“1. We have heard Mr.Tushar Hemani, the learned Senior Counsel assisted by Dr.Avinash Poddar, the learned counsel appearing for the petitioners (applicants).

2. By this Civil Application, the applicants have prayed to quash the impugned order dated 16.07.2020 passed by the Commissioner, Central Excise and CGST, Surat, confirming the demand of Service Tax totally amounting to Rs.24,67,98,056/­ (Rupees Twenty Four Crores Sixty Seven Lakh Ninety Eight Thousand and Fifty Six only) from the company i.e. M/s. SDB Diamond Bourse, Surat underproviso to sub­section (1) of Section 73 of the Finance Act, 1994.

3. By the impugned order, the Commissioner has also confirmed the order for recovery of interest at the applicable rate on the delayed payment of the Service Tax as may be found payable by the company. It appears that penalty of the like amount has also been imposed in the impugned order.

4. It is not in dispute that the applicants do have a remedy of preferring a statutory appeal before the CESTAT. However, Mr.Hemani, the learned Senior Counsel would like to convince this Court that he may not be relegated to exhaust the alternative remedy of preferring an appeal and he has a very good case on merits.

5. Hemani further pointed out that as the proceedings were pending before this Court, his client has not thought fit to prefer an appeal before the CESTAT and even otherwise, the period of limitation is to expire in this very week.

6. We could not take up this matter for hearing today as Mr.Devang Vyas, the learned Assistant Solicitor General of India, who would be appearing for the Union is on a medical leave for a period of three days. In such circumstances, it is not possible for this Court to proceed today with the hearing of this matter.

7. We are of the view that the applicants with a view to save the period of limitation may file the appeal before the CESTAT at the earliest but with a distinct understanding that the CESTAT shall not proceed to hear the appeal on merits as this Court is seized of the matter. We have suggested so keeping in mind that the period of limitation is to expire in near future.

8. Having regard to the issues raised in this litigation, we direct that till the next date of hearing, no coercive steps shall be taken towards the recovery of the demand. Due to paucity of time, it is not possible to hear this matter before Diwali break. In such circumstances, let this matter be notified on 08.12.2020.”

5. We have heard Mr.Tushar Hemani, the learned senior counsel, assisted by Dr.Avinash Poddar, the learned counsel appearing for the writ­applicants, and Mr.Devang Vyas, the learned Additional Solicitor General of India for the respondents.

6. It appears from the materials on record that the writ­applicant no.1 is a Section­8 Company incorporated under the Companies Act, 2013. The writ­applicants nos.2 to 8 respectively are the Directors of the Company and the writ­applicant no.9 is the Chief Financial Officer (CFO) of the Company. The Company has been registered under the Service Tax for providing taxable services, such as, rent­a­cab operator, security/detective agency,Business auxiliary service, construction services other than residential complex, including commercial/industrial buildings or civil structures, transport of goods by road/goods transport agency service, sponsorship service provided to body corporate or firm including sports sponsorship, works contract service and legal consultancy service.

7. It appears that the writ­applicants received an advance of Rs.3.40 crore from the interested members during the Financial Year 2014­15 for acquiring office space in the proposed ‘Diamond Bourse’ constructed by the writ­applicant. Such amount received by the writ­applicants was required to be reported in the ST­3 returns filed for the relevant period. However, as alleged, the receipt of the amount was suppressed in the ST­3 returns for the relevant period. On the basis of the information as regards the evasion of tax, the HQ Anti Evasion Branch of Surat­I Commissionerate initiated investigation. In the course of the investigation by the authorities, a search was conducted under Section 82 of the Finance Act, 1994, on 6th April 2016, and a panchnama was drawn observing as under :

“…After searching each and every corner of tables, drawers and computers, the office recover some records/documents, segregated the record/documents fond during the search and put them in a file place the said file having page no.1 to 21, containing Balance Sheets/Account of M/s.SDB Diamond Bourse, Surat for the period 2014­15 List of Prospective Buyers of Surat and Mumbai, from whom Initial Booking Amounts @ Rs.600/­ per Sq.ft. have been received. Article of Association of M/s.SDB Diamond Bourse etc. under seizure on reasonable belief that the same are relevant and useful for the purpose of further investigation under provisions of the Finance Act, 1994 and rules made thereunder.

This panchnama commenced at 11:30 hrs. on 6.4.2016 and concludes at 17:40 hrs. on the same day…”

8. It appears that after the search and seizure under Section 82, the writ­applicants preferred an application before the Authority for Advance Ruling (AAR) under Section 96(C) of the Act on the following two issues :

“A. Whether service tax would be leviable on the transaction of SDB with its members based on the concept of mutuality ?

B. Whether interest and/or penalty will be leviable, as claimed by the department, when there was no liability to pay service tax, given that the amount collected was in the nature of refundable deposit till the time the land was allotted by the Government of Gujarat to SDB;”

9. The application for advance ruling was received by the Authority on 21st June 2016. It is not in dispute that although the application was heard on 11th August 2017 by the Authority, yet till this date, no final order has been passed by the Authority.

10. In such circumstances referred to above, the impugned show­cause notice dated 22nd October 2019 came to be issued under Section 73(1) of the Finance Act, 1994, calling upon the writ­applicants to show­cause as to why (i) the service tax amounting to Rs.24,67,98,056/­ should not be demanded and recovered under proviso to sub­section (1) of Section 73 of Finance Act, 1994, by invoking the extended period of limitation; (ii) interest on the delayed payment, and (iii) penalty under Sections 78(1) and 77(1) of the Finance Act, 1994, be not imposed for the evasion of tax for the Financial Years 2014­15 to 2016­17.

11. As noted above, the AAR has confirmed the demand of service tax amounting to Rs.24,67,98,056=00, recovery of interest under Section 75, imposition of penalty of Rs.24,67,98,056=00 under Section 78(1) and further penalties under Sections 78A and 77(1) of the Act.

12. Tushar Hemani, the learned senior counsel appearing for the writ­applicants, has only one argument to canvass, and that is, with respect to the pendency of the proceedings before the AAR. According to Mr.Hemani, the Commissioner should have waited for the final order to be passed by the authority concerned so that the finding on the two questions referred to above would have been helpful to the Commissioner in taking the final decision as regards the impugned show­cause notice.

13. Hemani would submit that it is true that the application before the AAR was filed way back in the year 2016 but the ruling has not been given till this date. The writ­applicants are no way responsible for the delay.

14. In support of the aforesaid submission, Mr.Hemani seeks to rely on a decision of the Supreme Court in the case of Corporation vs. Commission of Income Tax, reported in (2020) 119 taxmann.com 137 (SC), wherein the Supreme Court has observed from paragraphs 11 to 20 as under :

“11. In our opinion, a vibrant system of Advance Ruling can go a long way in reducing taxation litigation. This is not only true of these kinds of disputes but even disputes between the taxation department and private persons, who are more than willing to comply with the law of the land but find some ambiguity. Instead of first filing a return and then facing consequences from the Department because of a different perception which the Department may have, an Advance Ruling System can facilitate not only such a resolution, but also avoid the tiers of litigation which such cases go through as in the present case. In fact, before further discussing this Advance Ruling System, we can unhesitatingly say that, at least, for CPSEs and Government authorities, there would be no question of taking this matter further once an Advance Ruling is delivered, and even in case of private persons, the scope of any further challenge is completely narrowed down.

12. It is as far back as in 1971 that a report was submitted by the Direct Taxes Enquiry Committee under the Chairmanship of Dr. K.N. Wanchoo, recognising the need for providing Advance Ruling System, particularly in cases involving foreign collaboration. The aim was to give advance rulings to taxpayers or prospective taxpayers, which would then considerably reduce the Revenue’s workload and decrease the number of disputes. This finally resulted in a scheme of Advance Ruling being brought into effect in 1993, with the introduction of a new Chapter in the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’). A quasi­judicial tribunal was established as the Authority for Advance Rulings (for short ‘AAR’) to provide certainty and avoid litigation related to taxation of transactions involving non­residents. The scope of the transactions on which an advance ruling can be sought from the AAR has gradually increased to now include both residents and non­residents, who can seek the same for issues having a substantial tax impact. Chapter XIX­B of the IT Act deals with advance rulings and it has been defined in Section 245N(a) of the IT Act. These rulings are binding both on the Income Tax Department and the applicant, and while there is no statutory right to appeal, the Supreme Court has held in Columbia Sportswear Company v. Director of Income Tax Bangalore (2012) 11 SCC 224 that a challenge an advance ruling first lies before the High Court, and subsequently before the Supreme Court. The advance ruling may be reversed in the event a substantial question of general public importance arises or a similar question is already pending before the Supreme Court for adjudication.

13. The ground level situation is that this methodology has We may notice a significant development in Section 245N of the IT Act. It was through Notification No.11456 dated 3.8.2000 that public sector companies were added to the definition of ‘applicant’, and in 2014, it was made applicable to a resident who had undertaken one or more transactions of the value of Rs. 100 crore or more.proved to be illusionary because there is an increasing number of applications pending before the AAR due to its low disposal rate and contrary to the expectation that a ruling would be given in six (6) months (as per Section 245R(6) of the IT Act), the average time taken is stated to be reaching around four (4) years! (See Deloitte Report on Advance Rulings in India: Delivering Greater Tax Certainty (Deloitte Tax Policy Paper 5, 2019). There is obviously lack of adequate numbers of presiding officers to deal with the volume of cases. Interestingly, the primary reason for this is the large number of vacancies and delayed appointments of Members to the AAR (ibid,). In view of the time taken, the very purpose of AAR is defeated, resulting in the mechanism being used infrequently as is evident from the ever­increasing tax related litigation.

14. We  may notice  a  significant  development  in Section 245N of the IT Act.  It was through  Notification No.11456 dated 3.8.2000 that public sector companies were added to the   definition   of   ‘applicant’,   and   in   2014,   it   was   made applicable to a resident who had undertaken one or more transactions of the value of Rs. 100 crore or more.

15.  Insofar as a resident is concerned, the limit is so high that it cannot provide any solace to any individual, and we do believe that it is time to reconsider and reduce the ceiling limit, more so in terms of the recent announcement stated to be in furtherance of a tax friendly face­less regime.

16. We may refer to the international scenario where there has been an incremental shift towards mature tax regimes adopting advance ruling mechanisms. The increase in global trade puts the rulings system at the centre­stage of a robust international tax cooperation regime. The Organisation for Economic Cooperation and Development (for short ‘OECD’) lists advance rulings as one of the indicators to assess trade facilitation policies, making it an aspirational international best practice standard. For example, Australia and New Zealand have a robust system of advance rulings wherein the decisions (which are public rulings affecting a large number of taxpayers) are given teeth by being made binding on the revenue authorities. New Zealand has gone a step further and innovated “status rulings” under which a taxpayer can apply to the Commissioner for a ruling on how a change in the law impacts an existing ruling.

17. In the United States, there is a mechanism for the Treasury to authorise guidance in the form of revenue rulings, procedures and notices. The mechanism again, has been bolstered by subsequent practice and interpretations of the United States courts, where rulings have indicated that taxpayers may be penalised if they act inconsistently with legal interpretations set out in the revenue rulings, procedures or notices.

18. Tax transparency has been a hallmark trait of the Swedish legal system. Swedish law requires public disclosure of ex ante tax administration such as advance rulings. Both the taxpayer as well as the Swedish Tax Agency can request an advance tax ruling, these rulings are published without information identifying the taxpayer that requested them. The Skatterättsnämnden, or the Council for Advance Tax Rulings is the Swedish Government agency which is vested with this power. The advance ruling system has played a crucial role in Sweden’s position as a country with one of the highest tax compliance rates in the world.

19. The aim of any properly framed advance ruling system ought to be a dialogue between taxpayers and revenue authorities to fulfill the mutually beneficial purpose for taxpayers and revenue authorities of bolstering tax compliance and boosting tax morale. This mechanism should not become another stage in the litigation process.

20. We, thus, consider it appropriate to recommend to the Central Government to consider the efficacy of the advance tax ruling system and make it more comprehensive as a tool for settlement of disputes rather than battling it through different tiers, whether private or public sectors are involved. A council for Advance Tax Ruling based on the Swedish model and the New Zealand system may be a possible way forward.”

15. In such circumstances referred to above, Mr.Hemani prays that the impugned order passed by the Commissioner be quashed and set­aside and the AAR may be directed to pass an appropriate order at the earliest in accordance with law.

16. On the other hand, this writ­application has been vehemently opposed by Mr.Devang Vyas, the learned Additional Solicitor General of India appearing for the respondents.

17. Vyas has a preliminary objection as regards the maintainability of the present writ­application. He would submit that initially the writ­applicants came at the stage of show­cause notice and the said show­cause notice has now culminated into a final order, which is appealable under Section 86 of the Finance Act, 1994, read with Section 35B of the Central Excise Act, 1944, before the Customs, Excise and Services Tax Appellate Tribunal.

18. Vyas would submit that the writ­applicants have already preferred the appeal and should therefore now pursue the appeal before the Tribunal.

19. Vyas would submit that the scheme of the advance ruling has been introduced for the assessees with the object that instead of first filing a return and then facing the consequences, the assessees can approach the ARA and obtain a ruling. However, according to Mr.Vyas, the remedy for advance ruling cannot be a ground to jeopardize or put in peril in any manner the ongoing investigation and thereby avoid the consequences of evasion of tax.

20. In such circumstances referred to above, Mr.Vyas prays that there being no merit in this writ­application, the same may be rejected and the writ­applicants may be asked to proceed further before the Tribunal.

21. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether we should interfere in the present writ­application.

22. Chapter ­XVII of the Act 2017 is of Advance Ruling. Section 95 provides for certain definitions. Section 95 reads as under :

“95. In this Chapter, unless the context otherwise requires,––

(a) advance ruling” means a decision provided by the Authority or the Appellate authority or the National Appellate Authority to an applicant on matters or on questions specified in sub­section (2) of section 97 or sub­section (1) of section 100 or of section 101C, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;

(b) “Appellate Authority” means the Appellate Authority for Advance Ruling referred to in section 99;

(c) “applicant” means any person registered or desirous of obtaining registration under this Act;

(d) “application” means an application made to the Authority under sub­section (1) of section 97;

(e) “Authority” means the Authority for Advance Ruling referred to in section 96.”

23. Section 96 provides for the Authority for Advance Ruling. Section 96 reads as under :

96. Authority for Advance Ruling.­- Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory.

24. Section 97 provides for the Application for Advance Ruling. Section 97 reads as under :

“(1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.

(2) The question on which the advance ruling is sought under this Act, shall be in respect of,––

(a) classification of any goods or services or both;

(b) applicability of a notification issued under the provisions of this Act;

(c) determination of time and value of supply of goods or services or both;

(d) admissibility of input tax credit of tax paid or deemed to have been paid;

(e) determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.”

25. Section 98 provides for the procedure on receipt of the application. Section 98 reads as under :

“(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 sub­section 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 specified in the order.

(3) A copy of every order made under sub­section (2) shall be sent to the applicant and to the concerned officer.

(4) Where an application is admitted under sub­section (2), the Authority shall, after examining such further material as may be placed before it by the applicant or obtained by the Authority and after providing an opportunity of being heard to the applicant or his authorised representative as well as to the concerned officer or his authorised representative, pronounce its advance ruling on the question specified in the application.

(5) Where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question.

(6) The Authority shall pronounce its advance ruling in writing within ninety days from the date of receipt of application.

(7) A copy of the advance ruling pronounced by the Authority duly signed by the members and certified in such manner as may be prescribed shall be sent to the applicant, the concerned officer and the jurisdictional officer after such pronouncement.”

26. Section 99 provides for the Appellate Authority for Advance Ruling. Section 99 reads as under :

“99. Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate Authority in respect of that State or Union territory.

27. Section 96D(2) referred to above assumes importance. We once again quote the same :

“96D. Procedure on receipt of application.­­

(1) xxxx xxxx

(2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application :

Provided that the Authority shall not allow the application where the question raised in the application is, –

(a) already pending in the applicant’s case before any Central Excise Officer, the Appellate Tribunal or any Court;

(b) the same as in a matter already decided by the Appellate Tribunal or any Court.”

28. Mr.Vyas is right to a certain extent that the issues raised by the writ­ applicants before the ARA have been gone into by the Commissioner in the Order in Original. In other words, the Authority, in its order dated 16th July 2020, has adjudicated upon both the issues. In such circumstances, for all purposes, the application before the ARA has become academic and we should ask the Appellate Tribunal to hear the appeal preferred by the writ­ applicants herein and decide the same expeditiously in accordance with law.

29. We do not undermine the importance of Chapter­ XVII as pointed out by the Supreme Court. A vibrant system of advance ruling can go a long way in reducing the taxation litigations. However, in the matters of the present type, sometimes the delay at the end of the ARA may frustrate the investigation which may not be in the interest of the Revenue.

30. In the aforesaid view of the matter, we have reached to the conclusion that we should not interfere with the impugned order passed by the Commissioner only on the ground that he should have waited for the ruling of the ARA. Thus, in the peculiar facts and circumstances of the case, we decline to grant any relief to the writ­ applicants and relegate them to pursue the appeal preferred by them, before the Tribunal. The Tribunal shall decide the appeal expeditiously in accordance with law without being influenced in any manner with any of the observations made by this Court in this order. The Civil Application also stands disposed of.

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