Case Title | Durga Projects & Infrastructure Pvt Ltd |
Court | Karnataka AAAR |
Honorable Judges | Member D.P.Nagendra Kumar & Member M.S.Srikar |
Citation | 2021 (2) GSTPanacea 39 HC Karnataka KAR/AAAR/02/2021 |
Judgement Date | 02-Febuary-2021 |
Council for Petitioner | Srikanth Aacharay G.B. |
Council for Respondent | NA |
Section | Section 100 |
In Favour of | Appeal dismiss on the ground that it is not maintainable |
The Karnataka Bench of Member D.P.Nagendra Kumar & Member M.S.Srikar has held that any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes. The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections. The appeal should have been filed by the Appellant against the advance ruling order. In view of the aforesaid, bench held that the appeal filed against the ROM order is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017.
FACTS OF THE CASE
Appellant is engaged in the business of property development i.e construction and sale of residential apartments. Appellant had executed projects under JDA with land owners for an agreed ratio of built-up area. Construction was commenced during pre-GST period and continued under GST regime
On account of implementation of GST, Appellant approached the Authority for Advance Ruling (AAR) seeking a ruling on the following question:-
Whether Applicant is liable for GST towards work executed under JDA on land owner’s portion where work commenced during pre-GST and continued under GST law? If taxis applicable the valuation for payment of tax
The AAR vide its order KARADRG No 17/2019 dated 25th July 2019 gave the following ruling:- The Applicant is liable to pay GST towards work executed under Joint Development Agreement on Land owner’s portion, on the value to be arrived at in terms of para 2 of the Notification No 11/2017-Central Tax (Rate) dated 28-06-2017 at the time of transfer of possession of the land owner’s portion of the flats
The Appellant filed an application dated 27-09-2019 for rectification of mistake (ROM) in the Advance Ruling order dated 25-07-2019 in terms of Section 102 of the CGST Act, 2017. In the ROM application, the Appellant stated that the ruling given by the Advance Ruling Authority in their case differed significantly with the ruling issued in the case of M/s Nforce Infrastructure India Pvt Ltd vide AAR Order KAR ADRG30/2018 dated 28-11- 2018 , even though both the cases were on similar facts. Further, the ROM application sought to rectify the ruling given with regard to valuation on the grounds that the provisions of Para 2 Of Notf No 11/2017 CT(R) cannot be made applicable to construction service provided to landowners under JDA since it does not involve transfer of undivided interest inland from developer to land owner. Right in the undivided interest in the land to the extent of land owner’s share was never transferred by land owner to the developer.
The Authority examined the ROM application and concluded that the Authority had considered all the submissions and that there is no error/apparent mistake on the face of the record and hence the ROM application was rejected in terms of Section 98(2) of the CGST Act vide order No KAR ROM 03/2020 dated 11-09-2020
Aggrieved by the rejection of the ROM application, the appellant has filed this appeal on the following grounds.
The Appellant submitted that the advance ruling that they are liable to pay tax entirely under GST even on the portion of work executed under pre-GST regime, is contrary to Section 142of the CGST Act. The said Section states that where tax is leviable under VAT/Service Tax law, then GST shall not be levied. Where the point of taxation is under pre-GST regime, then no GST can be levied under GST law.
COURT HELD
Considering the facts as recorded, held that any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes.
The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections. The appeal should have been filed by the Appellant against the advance ruling order dated 25-07-2019 within the period of 30 days from the date of communication of the said order or such extended period as permitted in terms of the proviso to Section 100(2)of the CGST Act
In view of the aforesaid, bench held that the appeal filed against the ROM order KAR ROM 03/2020 dated11-09-2020 is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017.
ANALYSIS OF THE JUDGEMENT
Bench,find that the GAAR has rightly relied on the aforementioned judgements as they support our contention and endorse the view that fusible interlining fabrics of cotton are classifiable under Heading 5903 of the First Schedule of the Customs Tariff Act, 1975. 18.
Having decided the classification of the product ‘Fusible interlining fabrics of cotton’ of the appellant, bench would also like to rely on the following decisions/judgements which support our view.
The same are mentioned hereunder:
(1) Order No. 33/WBAAR/2019-20 dated 11.11.2019 issued by the West Bengal Advance Ruling Authority in respect of M/s. Sadguru Seva Paridhan Pvt Ltd. wherein it was held that fusible interlining fabric of cotton is classifiable under Heading 5903 in Chapter 59 of the First Schedule to the Customs Tariff Act, 1975.
(2) Order No.11/2019-20 dated 12.03.2020 issued by the Uttarakhand State Advance Ruling Authority in respect of M/s. The Ruby Mills ltd. wherein it was held that fusible interlining fabric of cotton is classifiable under Heading 5903 of the GST Tariff Act, 2017.
(3) Order dated 19.03.2020 of the Appellate Authority for Advance Ruling, West Bengal in the case of Appeal Case No. 15/WBAAAR/APPEAL/2019 filed by M/s. Sadguru Seva Paridhan pvt.ltd. wherein the Order No. 33/WBAAR/2019-20 dated 11.11.2019 issued by the West Bengal Advance Ruling Authority was upheld
Download PDF :
Durga Projects & Infrastructure Pvt. Ltd
For Reference Visit:
Karnataka High Court
Read Another Case Law:
GST Case Laws