Durga Projects & Infrastructure Pvt. Ltd. – 2021 (48) G.S.T.L. 153 (App. A.A.R. – GST – Karnataka)

Order passed by lower authority rejecting Rectification of mistakes (ROM) application is not an order that can be appealed to AAAR.

Facts: Appellant is engaged in the business of property development and had executed projects under JDA with land owners for an agreed ratio of built-up area. Construction was commenced during pre-GST period and continued under GST regime. The appellant filed the application before AAR on the question Whether Applicant is liable for GST towards work executed under JDA on land owner’s portion on the value to be arrived at in terms of para 2 of the notification no. 11/2017 – CT(Rate) dated 28/06/2017 at the time of transfer of possession of the land owner’s portion of the flats. The appellant filed Rectification of mistake (ROM) application which was rejected by the authority dated 11/09/2020. Aggrieved by the order of AAR the appellant appealed to AAAR for rectification of mistake.

Held: The Hon’ble AAAR held that the appellant filed an application for advance ruling on 25/04/2018 before the authority in terms of section 97 of the GST Act,2017 and the ruling was pronounced on 25/07/2019. On 27/07/2019 the appellant filed an application for rectification of mistake to authority on the basis that different ruling was given in the matter of M/s. Nforce Infrastructure when the facts and circumstances are similar to present matter. The ROM application was not admitted and rejected vide order dated 11/09/2020. The authority based its decision on the ground that appeal can be filled before AAAR only against an advance ruling pronounced in terms of section 98(4). In this case, the ruling pronounced in terms of section 98(4) and appeal is maintainable against the said order within the statutory period of 30 days from the date of communication of said order. However, no appeal has been filed against the said order. The authority held that it is an incorrect interpretation that an appeal can be filed only after the order in respect of the rectification of mistake application is filed. The procedure for rectification of mistake is akin to an administrative function wherein mistakes are apparent on record are corrected by the authority which passed the order. Therefore, we hold that the order passed by the lower authority rejecting the Rom application is not an order which can be appealed before us.

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