In our previous article, we discussed about the basics of advance rulings and the Authority for Advance Ruling. In this article we will continue with appeal to the Appellate Authority.
Appealing against the Advance Ruling is a new provision in GST. Our current tax regime does not have any scope for appeal against Advance Ruling to any tribunal. It can be only appealed against through a special dispensation to Division Bench of the High Court. This process has been made easy by allowing appeal to the Appellate Authority under GST.
The applicant aggrieved by any advance ruling or the prescribed or jurisdictional CGST/SGST officer can appeal to the Appellate Authority.
Appeal against advance ruling must be made within 30 days (extendable by 30 days) from the date of the advance ruling.
Board here refers to the Central Board of Excise and Customs
The Appellate Authority can confirm or modify the ruling appealed against.
Appellate Authority will give its decision within 90 days from application.
If the members of the Appellate Authority differ in opinion on any point, then advance ruling cannot be issued.
A copy of the advance ruling signed by the Members will be sent to the applicant, the prescribed or the jurisdictional CGST / SGST officer and to the Authority.
The Authority or, the Appellate Authority can amend its own order to rectify any apparent mistake if it is noticed by –
—-within 6 months from the date of the order.
Any rectification which will result in increase in tax liability or decrease in input tax credit will be done only after giving notice and an opportunity of being heard to the applicant.
A substantive part of the order will not be amended during rectification.
The advance ruling will be binding only –
(a) On the applicant
(b) On the jurisdictional tax authorities in respect of the applicant.
If the law or the facts of the original advance ruling change then the advance ruling will not apply.
If the appellant has obtained the advance ruling by fraud or suppression of material facts, then the Authority or the Appellate Authority will declare the ruling to be void ab initio. All the provisions of GST will apply to the applicant as normal without any advance ruling.
An opportunity of being heard will be given to the applicant.
The Authority or, the Appellate Authority have all the powers of a civil court under the Code of Civil Procedure for the purposes of-
(a) discovery and inspection;
(b) enforcing the attendance of a person and questioning him on oath;
(c) investigations and enforcing production of books and other records,
Every proceeding before the Authority or the Appellate Authority will be a deemed judicial proceeding.
The Authority or the Appellate Authority have the power to regulate its own procedure in all matters arising out of the exercise of its powers.
GST Model Law does not specially mention the procedure for appealing against the Appellate Authority. So, it is expected to be similar to the current tax system. The person can appeal against the Appellate Authority through a special dispensation to Division Bench of the High Court as decided by the Supreme Court in the recent case of Colombia Sportswear company vs. Director of Income Tax, Bangalore-2012.
In current tax laws one can rely on an existing legal decision. GST being completely new, one can only take guidance as to how make tax arrangements for particular transactions at his own risk. This is where Advance Tax ruling can help.
But Advance Ruling under GST can even increase the scope of interpretation for a particular issue. Different jurisdictional tax authorities can give different interpretations to the same subject in case of dispute and then advance ruling will not be possible. It will defeat the purpose of advance ruling. As there are no earlier cases to base opinions on, the floor will be open to all interpretations. This may in turn bring in more appeals and legislation later on thus removing the very advantage of advance ruling.
We have to wait and watch as to how the advance ruling will help in reducing legal disputes in case of GST.
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