2026-VIL-278-GSTAT-DHR
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SGST Tribunal

GST - Jurisdiction of the State Bench of the Tribunal to examine the validity of an Advance Ruling under Section 95 of the CGST Act, 2017 which was never challenged before Appellate Authority for Advance Ruling - The Respondent obtained an advance ruling holding that the licensing service for the right to use minerals attracted tax at the same rate as on supply of like goods for the period 01.07.2017 to 31.12.2018, and the ruling was not challenged by the Revenue under Section 100 - Whether the Tribunal, that too a State Bench, can go into the jurisdiction of the Authority when the ruling has not been challenged at any stage - HELD – The Revenue has challenged the maintainability of the advance ruling itself on the ground that the said ruling was without jurisdiction for the reason it could only be given on matters having prospective application and not on completed past transactions - The scheme of Chapter XVII governing the landscape of Advance Ruling, provides a hierarchy of appeal against the ruling before the Appellate Authority and the National Appellate Authority, and the Ruling was neither rectified under Section 102 nor alleged to be void under Section 104. In view of Section 109(4), the State Bench does not have jurisdiction to decide the validity of the order of the Authority - The Tribunal cannot decide the jurisdiction of the Authority in rendering the ruling - The appeals filed by the revenue against the impugned orders-in-appeal lack merit and dismissed - Binding nature of an Advance Ruling under Section 103 of the CGST Act, 2017 - Whether a Board circular constitutes a change in law, facts or circumstances under Section 103(2) - The Revenue contended that the Advance Ruling ceased to bind it on issuance of a Board circular nearly two years later, which clarified that the service attracted the higher rate from 01.07.2017 - Whether the advance ruling is binding on the Department vis-a-vis the Respondent or the Department can resile from it under Section 103(2) - HELD - Under Section 103(1), the Ruling is binding on the applicant and on the concerned or jurisdictional officer in respect of that applicant, and as it was not appealed against, it attained finality. A Circular is an executive instruction under Section 168 and is binding on the Departmental officers but not on the assessee or the courts, whereas the Ruling is a quasi-judicial order. The expression change in law under Section 103(2) means a change in the Act, Rules or rate notification and not a Circular. A Circular adverse to the assessee cannot be applied retrospectively to nullify a quasi-judicial order in his favour. As there was no change in facts, circumstances or law, the Revenue cannot resile from the ruling - The Revenue was bound by the Ruling and the refund sanctioned in accordance with it was in accordance with law - Determination of the rate of tax on licensing service for the right to use minerals for the period 01.07.2017 to 31.12.2018 on the basis of a Board circular - Whether the rate of tax can be determined on the basis of Circular No.164/20/2021-GST - HELD - Under Section 9(1), the rate of tax is to be notified by the Government on the recommendation of the Council through a notification, and a circular issued under Section 168 can only clarify the law and can never create a levy. In terms of Article 265 of the Constitution, no tax can be levied or collected except by authority of law, which means the Act, notifications and Rules and not a Circular - The Revenue could not point out any notification or entry prescribing the higher rate for the period, and the demand resting solely on the Circular is without the authority of law - The Revenue is not justified in relying on the Circular to hold that the rate during the period was the higher rate - Recovery of erroneous refund under Section 73 of the CGST Act, 2017 where the refund of excess tax paid was sanctioned in accordance with an advance ruling, and grounds raised beyond the SCN - The refund of the difference between the tax paid and the tax payable under the ruling was sanctioned under Section 54 with a Chartered Accountant certificate and reversal of the corresponding credit in the electronic credit ledger - Revenue contended in the second appeal that the refund could be claimed only by the service provider and that the Respondent was unjustly enriched - Whether the refund can be said to be erroneous and whether the new grounds can be agitated - HELD - The Ruling held the field when the refund was sanctioned and was neither challenged, rectified nor alleged to be obtained by fraud. A subsequent Circular holding a contrary view cannot make the refund erroneous. The proceedings under Section 73 on the basis of the Circular are void ab initio - The grounds of refund being available only to the service provider and of unjust enrichment were not taken in the SCN or the Order-in-Original, and under Section 75(7) they cannot be raised at the stage of the second appeal - In any case, the recipient who has borne the incidence of tax is entitled to claim refund, and the Respondent discharged the onus under Section 54(8)(e) and Rule 89(2)(m) by the CA certificate and the reversal of credit, which the Revenue did not dispute. The question whether Section 73 can be invoked independently without challenging the refund order in appeal or revision need not be decided - The orders of the FAA setting aside the demand, penalty and interest are confirmed.
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