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February 24, 2022

Authority rejects application as the issue was pending before revenue

by Mahesh Mara in GST, Legal Court Judgement

Authority rejects application as the issue was pending before revenue

Fact and Issue of the case

M/s. Continental Engineering Corporation is a civil engineering and construction company. Infrastructure engineering is the appricant,s core business. The applicant is invorved in various projects rike highway, tunner, bridge, mass rapid transit, and high-speed rair projects and is registered in the state of Andhra
Pradesh with GSTIN 37 AACCC6948CLZO. The applicant has entered into a contract on 20.02.2007 with National Highway Authority of India (NHAI) for the work of Rehabiiltation and upgrading of existing 2-lane road to 4 rane road divided carriageway configuration from 293,400 km to 336,000 km in Hyderabad- Bangarore section of NH-7 in the State ofAndhra pradesh on North South Corridor. With regard to the above contract, the appricant compreted its work contract services on 17. 10.2002 i.e. prior to csr Regime (before 01.07.2017) as evident. from the discharge riabirity certificate issued by the Engineer appointed by NHAI. However, at the tame of making the payment to the appricant, dispute
arose. So, the appricant fired craim under arbitration.

Questions raised before the authority:

a. Whether GST is applicable on the proposed receipt oF money in case of arbitration claims awarded for works contract completed in the Pre-GST regime?

b. If the answer to the above Question is yes then under what HSN Code and GST rate the liability is to be discharged by the applicant?

Observation of the Tribunal

On Verification of basic information of the applicant, it is observed that the applicant falls under State jurisdiction, i.e. Anantapur-II Circle, Anantapur Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per the Sec. 98(1) of CGST /APGST Act 2017. Remarks are received from the jurisdictional officers concerned. The Superintendent of Central Tax, Anantapur CGST Range-1 stated that no proceedings are lying pending or passed relating to the applicant on the issue, for which the Advance Ruling sought by the applicant. But the State jurisdictional officer, i.e. Assistant Commissioner, Anantapur-II Circle, Anantapur Division had remarked that no proceedings were passed so far but they were lying pending on the same issue pertaining to the applicant’s works contract agreement with the Nation Highway Authority on 20.02.2007 for rehabilitation and up gradation of existing 2-lane Road to 4-lane divided carriageway configuration from 336km to 376km, Hyderabad Bangalore Section of NH-7 in the State of Andhra Pradesh on North-South Corridor Contract Pkg – C-13. The work has been completed and defect liability certificate was issued in pre-GST regime i.e., 01.04.2013 by the Engineer Egis Route appointed by NHAI. The arbitration authority passed an order on 15.03.2019 in favour of M/s. Continental Engineering Corporation – Andhra Pradesh for an amount of INR 12,73,06,493/- Thereafter, the NHAI has challenged the Arbitration Award dated 15.03.2019 before the Hon’ble High Court for Delhi. Afterwards, as per the settlement agreement dated 27.11.2019, the final settlement took place between the two parties for an amount of INR 10,00,00,000/- . The said amount was credited to M/s. Continental Engineering Corporation Andhra Pradesh in December 2019 with tax payer’s refund claim of Total Rs.1,07,14,286/- (SGST Tax Rs.5357143/- and CGST Tax Rs.5357143/-) deducted from the consideration received during GST period which is pertaining to Works Contracts done under APVAT Act. Thus, based on the remarks of State Tax authorities, it is noticed that the refund claim on the same issue is lying pending with them.

The tribunal has examined the issues raised in the application and the submissions of the applicant as well. In the context of the remarks submitted by the jurisdictional officer, we examine the admissibility of the application before going into the merits of the case This authority after examining the relevant proviso to Sec 98(2), which reads as under, “Provided that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of applicant under any of the provisions of this act:”, makes the following observation that it is a fit case for rejection as the applicant approached the Authority for Advance Ruling for clarification while it is still pending with the Revenue on the same issue but under different provisions i.e., under refund provisions of the Act. The applicant’s plea for admission of his application for advance ruling in terms of provisions of sub section (2) of section 98 of CGST Act, 2017 is rejected.


The AAR has rejected the application made by the taxpayer

Read the full order from below


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