Bengal Peerless Housing Development Company Limited vs. W.B. Authority For Advance Ruling & Ors

Held

The Court held that the circular dated August 3, 2022, was not applicable to the petitioner's case for two reasons. Firstly, it did not directly cover the specific issue raised by the petitioner. Secondly, and more importantly, the circular was not in existence at the time the Advance Ruling Authority and the Appellate Advance Ruling Authority passed their respective orders. Therefore, the petitioner's argument for retrospective application of this circular was rejected. The Court, upon perusal of the impugned order of the appellate authority and the reasons provided therein, found no grounds to interfere with the order dated September 25, 2019. The Court did not explicitly address the specific contentions raised by the GST authorities regarding car parking space or the abatement calculation, but implicitly upheld the WBAAR's decision by not interfering with it.

Facts

The petitioner, Bengal Peerless Housing Development Company Limited, challenged an order dated September 25, 2019, passed by the West Bengal Appellate Authority for Advance Ruling (WBAAR). This order was an appeal filed by the respondent GST authorities against an earlier ruling dated May 2, 2019, by the Advance Ruling Authority. The petitioner had sought a ruling on whether the supply of 'preferential location services' (PLS) constituted a composite supply with construction services, with construction being the principal supply. The GST authorities appealed the initial ruling on grounds that it incorrectly included the 'right to use of car parking space' and that the abatement for construction services was applied to the entire composite supply value, potentially costing the government revenue. The WBAAR modified the initial ruling.

Key Issues

1. Whether the circular dated August 3, 2022, issued by the GST authorities, which was subsequent to the impugned orders, is applicable retrospectively to the petitioner's case, as argued by the petitioner. 2. Whether the order of the West Bengal Appellate Authority for Advance Ruling dated September 25, 2019, which modified the initial advance ruling, is legally sustainable. Petitioner's arguments: The petitioner contended that the circular dated August 3, 2022, was clarificatory in nature and should be treated as retrospective, thus applying to their case. They relied on this circular to support their challenge to the WBAAR's order. Revenue/State's arguments: The respondent GST authorities argued that the initial ruling erred by including the 'right to use of car parking space' in the ruling, which was not part of the petitioner's request. They also argued that the WBAAR erred in law by confirming the applicability of abatement prescribed for construction service under sl. No. 3(i) read with paragraph 2 of the Rate Notification on the entire value of the composite supply, which they claimed would result in a loss to the government exchequer.