2026-VIL-711-KAR
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SGST High Court Cases

GST - Locus standi of third party to challenge Advance Ruling orders - Petitioner, being a recipient of supplies under a contract with the party who obtained the Advance Ruling, seeks to challenge an order passed by the Appellate Authority for Advance Ruling classifying supplies and services attracting varying rates of GST - Though the petitioner was not a party to the Advance Ruling proceedings, contends that by virtue of contractual obligation to reimburse the applicable GST, the order imposed financial burden and civil consequences upon it - Whether a writ petition challenging an order passed by the AAR or the AAAR can be maintained by a person other than the applicant and the concerned officer, and whether such writ petition is maintainable in the absence of locus standi – HELD – In terms of Section 103 of the CGST Act, 2017 an order passed by the Advance Ruling or the Appellate Authority is binding only on the applicant who had sought it and on the concerned officer or the jurisdictional officer, and is a decision in personam binding only on the parties to the proceedings - Having regard to the scope and ambit of Chapter XVII dealing with Advance Rulings, there is no scope to bind third parties and there is no scope for a challenge at the instance of any person other than the applicant or the concerned officer, irrespective of the consequences flowing from such Ruling - Any financial implication arising by way of increased liability pursuant to an Advance Ruling is merely a consequence flowing from such ruling in the light of the contractual obligations between the parties. The general principle that an aggrieved person is one who suffers adverse consequences by reason of a decision cannot be mechanically applied to pronouncements rendered under Chapter XVII of the Act - Having regard to the legislative intent and the scope of the provisions, the Court does not find any scope for a third party either to claim the benefit of such ruling or to question the same. The Authority for Advance Ruling is essentially an alternate advance dispute resolution mechanism and cannot be treated as general litigation so as to permit third parties to enter the arena of such proceedings - When there is no contractual stipulation classifying the supply of goods or services or specifying the applicable rate of GST, the question of the impugned ruling imposing any additional liability does not arise and consequently the petitioner cannot be regarded as an aggrieved person. Entertaining such writ petition would necessarily require the Court to interpret the contract as incorporating clauses relating to the classification of goods or services and the applicable rate of GST which are otherwise absent in the contract, which exercise would amount to rewriting the terms of the contract which is impermissible in exercise of jurisdiction under Article 226 - The writ petition is not maintainable for want of locus standi and is accordingly dismissed
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