Saisanket Enterprise VS Authority For Advance Ruling

The petitioner has initiated the current petition against [defendant/respondent] alleging [insert allegations], marking the commencement of a legal process aiming to address the stated grievances. Throughout the proceedings, both parties will be afforded the opportunity to present evidence, arguments, and rebuttals within the framework of the law, adhering to established procedures and precedents. The petitioner’s assertions will undergo scrutiny and evaluation, while the respondent will have the chance to provide counterarguments and substantiate their position. As the legal process unfolds, various motions, hearings, and potentially negotiations may take place, all contributing to the gradual resolution of the matter at hand. Ultimately, the outcome will be determined by the impartial application of legal principles and the assessment of factual evidence, with the aim of achieving a just and equitable resolution for all parties involved.

The petitioner has initiated legal action against two specific orders: one issued on December 10, 2020, by the Authority for Advance Ruling in Madhya Pradesh (case No. 14/2020), and another on July 26, 2021, by the Madhya Pradesh Appellate Authority for Advance Ruling (case No. MP/AAAR/05/2021). The petitioner, a Works Contractor involved in the construction of an irrigation dam, is registered under the Central Goods and Services Tax Act, 2017, across various states, including Madhya Pradesh.

The petitioner was subcontracted by M/s Navayuga Engineering Company Ltd. for certain work related to the Narmada Valley Project, executed between January 22, 2017, and January 25, 2018. Following a search of the petitioner’s premises by the authorities of the Director-General of Goods and Service Tax Intelligence, it was discovered that there had been a GST evasion. Consequently, the petitioner received a notice on May 21, 2020, demanding the discharge of outstanding GST liability in Form DRC-03, at an applicable rate of 18%, for works contract services provided as a subcontractor to the main contractor, M/s Navayuga Engineering Company Ltd., from July 2017 to January 2018.

Subsequent to receiving the notice, the petitioner approached the Authority for Advance Ruling in Madhya Pradesh for clarification and resolution.

The petitioner in this case is a works contractor involved in the construction of an irrigation dam, registered under the Central Goods and Services Tax Act, 2017 in various states, including Madhya Pradesh. They were subcontracted by M/s Navayuga Engineering Company Ltd. to execute certain works related to the Narmada Valley Project from January 22, 2017, to January 25, 2018.

Subsequently, authorities from the Director-General of Goods and Service Tax Intelligence conducted a search on the petitioner’s premises and discovered GST evasion. A notice was issued on May 21, 2020, instructing the petitioner to settle the remaining GST liability at the applicable rate of 18% on works contract services provided as a subcontractor to M/s Navayuga Engineering Company Ltd. from July 2017 to January 2018.

Challenging this notice, the petitioner sought clarification from the Authority for Advance Ruling in Madhya Pradesh, contending that according to Notification No. 11/2017 (T (R) as amended on August 22, 2017, the applicable tax rate for subcontractors should be 12%. They posed a specific question regarding the tax rate applicable to subcontractors in cases where the principal contractor is taxed at 12%.

However, the Advance Ruling Authority, after obtaining comments from the Department and conducting a personal hearing, declined to grant an advance ruling on December 10, 2020, citing the First Proviso of Section 98(2) of the CGST/MPGST Act, 2017. The petitioner then appealed to the Appellate Authority under Section 101 of the CGST/MPGST Act, 2017, which upheld the decision of the Advance Ruling Authority, prompting the petitioner to file a writ petition before the court.

The petitioner’s senior counsel argues that both the Advance Ruling Authority and the Appellate Authority misinterpreted Section 98(2) of the CGST Act, 2017. They assert that the proviso only bars an advance ruling if the question raised is pending or decided in any proceedings under the Act, which is not the case here.

Thus, the petitioner seeks relief from the court against the orders of the Advance Ruling Authority and the Appellate Authority, arguing for a correct interpretation of the relevant provisions of the GST Act.