C. M. S. Info Systems LTD. vs. The Commissioner, CGST And Ors

Held

The Court held that the decision-making process of the AARA was flawed. The fundamental submission of the petitioner, that money being transported as cash should be considered 'goods' under Section 2(52) of the GST Act, based on the definition of 'money' in Section 2(75), was recorded but not dealt with in the impugned order. The Court found that the AARA's reliance on a subsequent press note recommending ITC for money transportation did not address the core legal question of whether money was included in the definition of 'goods' prior to such recommendation. The Court emphasized that authorities must consider all submissions made by parties and provide findings supported by reasons. Failure to address a submission renders the order vulnerable to judicial review. Consequently, the impugned order of the AARA was set aside, and the question regarding ITC was restored to the AARA for fresh disposal in accordance with the law, with a direction to consider the petitioner's submissions and provide reasoned conclusions.

Facts

The petitioner, C.M.S. Info Systems Ltd., challenged an order dated August 6, 2018, passed by the Maharashtra Appellate Authority for Advance Ruling (AARA) under Section 101 of the CGST Act, 2017, and MGST Act, 2017. The AARA ruled that input tax credit (ITC) is not available on the purchase of motor vehicles used to carry cash. The petitioner had initially sought an advance ruling on two questions: (i) whether the supply of motor vehicles as scrap after usage attracts GST, and (ii) if so, whether ITC is available on the purchase of such vehicles used for cash management. The Advance Ruling Authority (ARA) answered question (i) affirmatively but had a difference of opinion on question (ii), leading to a reference to the AARA.

Key Issues

1. Whether the decision-making process of the AARA in its order dated August 6, 2018, was flawed, specifically concerning the petitioner's submissions regarding input tax credit on motor vehicles used for transporting cash. Petitioner's Arguments: The petitioner contended that the AARA failed to address their principal submission that money, when transported as cash and not used as legal tender, should be considered 'goods' under Section 2(52) of the GST Act, based on the definition of 'money' in Section 2(75). They argued that if this submission were considered, the outcome regarding ITC availability under Section 17(5) (which allowed ITC for vehicles used for transporting goods) might have been different. They asserted a flaw in the decision-making process for not dealing with this core argument. Revenue's Arguments: The respondent argued that the impugned order did address the petitioner's submission and that there was no flaw in the decision-making process. They pointed to the order's reference to a press note from the GST Council recommending the allowance of ITC for motor vehicles used for transporting money, suggesting the petitioner's contention was considered.