Bombay High Court Clears Path for Advance Ruling Despite Pre-Show Cause Notice.
The petitioner expressed concerns that the pre-show cause notice might deter the Advance Ruling Authority from deciding their application on merits. The Court noted that under Section 98 of the SGST Act, the authority is obligated to pronounce advance rulings within 90 days, a timeline already exceeded. The Court clarified that the pre-show cause notice does not bar the authority from deciding the pending application since the proviso to Section 98(2) applies only when proceedings are pending or decided at the time of filing the application.
Relying on precedents, the Court emphasized that inquiries or investigations do not qualify as “proceedings” under the Act. Therefore, the subsequent pre-show cause notice does not impede the disposal of the application. The Court accepted the government's assurance that the application would be decided on merits within three months.
While declining the petitioner’s request to restrain further action based on the pre-show cause notice, the Court highlighted the limited scope of interference with such notices and discouraged premature petitions that bypass alternate remedies. The rule was disposed of with directions to the Advance Ruling Authority to decide the application expeditiously.
GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017