Court Upholds Finality of Advance Ruling, Emphasizing Binding Nature Under CGST Act
In a significant judgment, the Himachal Pradesh High Court has quashed a show cause notice issued to M/s. Amit Engineers by the Directorate General of Goods & Service Tax Intelligence, Chandigarh. The notice, dated February 14, 2025, demanded payment under Section 73(8) of the Central Goods and Services Tax (CGST) Act, 2017, within 30 days.
The petitioner, M/s. Amit Engineers, represented by advocates Ajay Jain and Vandana Thakur, challenged the notice on grounds of an existing advance ruling dated April 11, 2022. This ruling, which classified "Roof Mounted AC Package Units" under Chapter 86.07 of the GST Tariff, was accepted and never contested, thus attaining finality.
The court, comprising Justices Vivek Singh Thakur and Ranjan Sharma, emphasized that the advance ruling is binding under Section 103(2) of the CGST Act unless declared void under Section 104(1). The court found the show cause notice to be without foundation, as it conflicted with the settled law and finality of the advance ruling.
Senior Counsel Vijay Kumar Arora, representing some of the respondents, argued that the petitioner should have responded to the notice and pursued appellate remedies under the CGST Act. However, the court noted that, given the finality of the advance ruling, it was unnecessary to subject the petitioner to further proceedings.
Exercising its discretion under Article 226 of the Constitution of India, the court quashed the impugned notice, highlighting that the invalidity of the notice was apparent on the face of the record. The decision underscores the binding nature of advance rulings unless formally contested and voided.
Bottom line:-
GST - Validity of show cause notice under Section 73(8) of CGST Act - Notice quashed due to finality of Advance Ruling under Section 103(2) of CGST Act, 2017 - Held, Advance Ruling is binding unless declared void under Section 104(1) of CGST Act - Exercise of discretion under Article 226 of Constitution justified.
Statutory provision(s): CGST Act, 2017 Sections 73(8), 103(2), 104(1); Constitution of India, Article 226
M/s. Amit Engineers v. Union of India, (Himachal Pradesh)(DB) : Law Finder Doc id # 2902738
