Rajasthan High Court: GST Advance Ruling Appeals Remain Valid Beyond 90-Day Window — Section 101(2) Timeline is Directory
Case Overview
Case: Giri Transport Company Vs Appellate Authority For Advance Ruling
Court: Rajasthan High Court
Order Under Challenge: Order dated 01.07.2024 passed by Chief Commissioner (SGST), Jaipur
A Goods Transport Agency operating in Rajasthan filed an application before the Rajasthan Authority for Advance Ruling (AAR) under Section 97 of the RGST Act, 2017, seeking clarity on whether the value of diesel provided free of cost (FOC) by a service recipient must be factored into the taxable value of goods transport services. The AAR, vide its ruling dated 16.06.2022, concluded that such FOC diesel does not form part of the taxable value of GTA services.
Following this ruling, two separate departmental appeals were filed — one by the CGST authority and another by the SGST authority — challenging the AAR's findings. The assessee raised multiple preliminary objections against the maintainability of these appeals before the Appellate Authority for Advance Ruling (AAAR), which rejected all such objections through its order dated 01.07.2024 and directed the matter to proceed on merits. Aggrieved by this rejection, the assessee approached the Rajasthan High Court in a second round of litigation.
The High Court dismissed the writ petition, finding no reason to interfere with the AAAR's well-reasoned order, and directed the assessee to participate in the appellate proceedings on merits.
Background and Factual Matrix
The Advance Ruling Application
The assessee, a Goods Transport Agency (GTA), sought an advance ruling on a specific question: whether diesel supplied free of cost by the recipient of transport services is required to be included in the taxable value of the transport services rendered.
During the advance ruling proceedings under Section 98 of the RGST Act, 2017, the jurisdictional officer (respondent No.3), who also served as the concerned officer, appeared in an official capacity and took a definitive position in favour of the assessee — contending that GST is not leviable on FOC diesel supplied by the service recipient where such goods fall within the contractual scope of the recipient.
The Rajasthan AAR, after considering the matter, issued its ruling dated 16.06.2022, holding that the value of FOC diesel is not includable in the taxable value of GTA services.
Departmental Appeals and the Preliminary Objections
Two appeals were subsequently filed before the AAAR challenging the AAR ruling:
- **Appeal by CGST authority (Appellant No.1)😗* Filed on 12.08.2022
- **Appeal by SGST authority (Appellant No.2)😗* Filed on 14.10.2022
The assessee challenged these appeals by raising the following preliminary objections:
- The 90-day timeline under
Section 101(2)of the RGST Act had expired, rendering the proceedings non-est - Both appeals were filed beyond the permissible limitation period under
Section 100(2) - The CGST authority lacked locus standi as it was neither the "concerned officer" nor the "jurisdictional officer"
- The appeals were filed in physical (hard copy) format instead of electronically, contrary to
Section 100(3)read with Rule 106 - The department could not take a position contradictory to the stand already taken before the AAR (estoppel)
The AAAR rejected all five objections vide the impugned order dated 01.07.2024. The assessee, having earlier approached the High Court once (in CWP No.14009/2022), came before the Court for a second time challenging this order.
Issues Framed and Arguments Advanced
Assessee's Arguments
On the 90-Day Mandatory Timeline
The assessee's counsel contended that Section 101(2) of the RGST Act uses the expression "shall", which in its plain and ordinary sense connotes a mandatory obligation. It was argued that Chapter XVII of the RGST Act dealing with advance rulings is a self-contained code prescribing strict timelines. The absence of qualifying language such as "as far as possible" — present in other provisions like Section 101C and Section 107 of the CGST Act — was said to reflect a conscious legislative decision to make the 90-day period mandatory.
The assessee further submitted that proceedings remained stagnant for over 1.2 years after the filing of appeals, and no steps were taken until March 2024, entitling the assessee to reasonably conclude that the department had abandoned the matter.
On Limitation
It was contended that the advance ruling dated 16.06.2022 was duly communicated in June 2022 via Speed Post and was also uploaded on the GST portal on 17.06.2022. This, it was argued, constituted valid service under Section 169 of the Act. The India Post tracking report and a letter dated 15.09.2022 issued by the AAR office confirming Speed Post dispatch on 21.06.2022 were relied upon. Since both appeals were filed well after the limitation period reckoned from these dates, the appeals were submitted to be time-barred.