Show Cause Notice During Advance Ruling Application Does Not Prevent Decision on Merits | HC

Case Details: General Motors India (P.) Ltd. v. State of Maharashtra - [2024] 169 taxmann.com 483 (Bombay)

Judiciary and Counsel Details

• M.S. Sonak & Jitendra Jain, JJ.
• Darius Shroff, Sr. Adv., Mahir Chablani & Ms Dimpal Jangid, for the Petitioner.
• Ms Shrutin Vyas, Addl. GP & Ms P. N. Diwan, AGP for the Respondent.

Facts of the Case

The assessee filed an application for advance ruling on 20-12-2023. During the pendency of the application, the authority issued pre-show cause notice under section 73(5) of the MGST Act. The assessee filed a writ petition before the Bombay High Court to direct the authority to decide the application for advance ruling on the taxability of the sale of land and buildings carried out pursuant to the Asset Purchase Agreement (APA) on merits.

High Court Held

The High Court noted that the application seeking advance ruling was filed when the question raised in the application was not already pending or decided in any proceedings in the case of the assessee under any provisions of the CGST/SGST Act. The phrase ‘already pending’ would mean and imply that it is pending on the date of filing the application seeking an advance ruling.

Therefore, the Court held that the subsequent issue of pre-show cause notice was not a bar for the authority to decide the application seeking advance ruling on merits.

List of Cases Reviewed

• DRI (Headquarters) v. Spraytec India Ltd (2023) 4 Centax 211 (Del)
• Srico Projects Pvt. Ltd. v. Telangana State Authority for Advance Ruling & Anr. 2022 106 GSTR 247, relied on.