Advance ruling maintainable if prior proceedings closed on payment without adjudication on merits
Issue
Whether the Authority for Advance Ruling (AAR) can refuse to admit an application under Section 98(2) on the ground that the issue was “pending or decided” in prior proceedings, when those proceedings were closed solely due to the voluntary payment of tax by the applicant without a determination on the merits.
Facts
Petitioner: A Temple Board receiving various types of income.
Prior Proceedings: The Department initiated proceedings under Section 73 (determination of tax not paid) regarding certain income heads.
Payment without Contest: The Petitioner discharged the tax liability highlighted in the notice without challenging it to avoid litigation.
Closure of Case: The Department closed the Section 73 proceedings citing the remittance of tax. Crucially, the order did not analyze or decide the actual legal liability or taxability of the income on merits.
Advance Ruling Application: Subsequently, the Petitioner sought an Advance Ruling to determine the taxability of such incomes for future clarity.
Rejection by AAR: The AAR refused to exercise jurisdiction, citing the proviso to Section 98(2), arguing that the questions raised were already subject to proceedings/investigation by Central GST Intelligence.
Decision
Interpretation of “Decided”: The High Court held that the AAR can refuse jurisdiction only if the specific question is already pending or decided under the Act.
No Adjudication on Merits: The Court observed that the prior proceedings under Section 73 were closed purely because the tax was paid. The legal aspects of taxability were never considered, argued, or adjudicated upon.
Jurisdiction Exists: Since the specific legal question regarding the taxability of the temple’s income remained undecided by any statutory authority, the bar under Section 98(2) does not apply.
Order: The order closing the prior proceedings cannot be a valid reason to deny an Advance Ruling. The AAR was directed to admit the application and decide the issue on merits.
Key Takeaways
“Decided” means Adjudicated: The statutory bar preventing an Advance Ruling if a matter is “decided” implies a decision on the legal merits. A procedural closure of a case based on voluntary payment does not constitute a “decision” on the question of law.
Right to Clarity: Paying tax to settle a past dispute (often to avoid interest/penalty) does not strip a taxpayer of their right to seek an Advance Ruling to clarify the tax position for future transactions.
Section 98 Scope: The AAR cannot abdicate its jurisdiction to provide certainty to taxpayers unless there is an active parallel litigation or a binding precedent specific to that applicant.
Would you like me to draft an application for an Advance Ruling ensuring it distinguishes any past voluntary payments to avoid rejection on admission?
HIGH COURT OF KERALA
Travancore Devaswom Board
v.
Commissioner of State Goods and Service Tax*
ZIYAD RAHMAN A.A., J.
WP (C) NO. 18624 OF 2025
OCTOBER 7, 2025
Smt. Latha Anand, M.N. Radhakrishna Menon, K.R. Pramoth Kumar, S. Vishnu (Arikkattil), Sidharth P.S. and Radhakrishna Pillai B, Advs. for the Petitioner. P.T. Dinesh, Adv. for the Respondent.
JUDGMENT
1. The petitioner is the Travancore Devaswom Board, and this writ petition is submitted by the petitioner Board, being aggrieved by Ext.P5 order passed by the 3rd respondent, in which the 3rd respondent refused to exercise the jurisdiction vested upon it under Section 98 of the CGST Act.
2. The petitioner Board obtained registration under the CGST Act as per Ext.P1, with effect from 27.02.2018. According to the petitioner, such a registration was necessitated in view of the fact that, the petitioner usually enters into contracts with various contractors for construction activities related to the Board. In respect of the certain income received by the petitioner Board, proceedings under Section 73 of the CGST Act were initiated against the petitioner, by issuing a notice in this regard, in which the income certain heads were highlighted for the purpose of taxation. However, the petitioner discharged the said liability without challenging the same, and taking note of the fact that, the petitioner had remitted the tax referred to in the notice issued under Section 73 of the Act, the proceedings were closed as per Ext.P3, without considering the liability of the petitioner to pay the tax for the aforesaid income, on merits. Ext P3 was the said order, in which the income which was the subject matter of investigation were under the following heads;
| “i) | Income from lease or rental of properties: Income from lease or rental of Shops, Land, Parking Area, Pilgrim Shelters, Comfort Stations, Kalyanamandapams etc. in the precincts of temples owned or managed by the Board, for rent beyond the exemption limits stipulated under Notification No. 12/2017-CT(R) (supra) i.e. Rs. 10000/ or more per day/per month, as the case may be, and Mobile Tower Rent; |
| (ii) | Income from transfer of rights: Income from temporary transfer of various rights in the temple precincts viz. Pulppaya supply, Sale of various items, Collection of coconut ete. to third parties, through auctions, who in turn supply such goods and services and collect consideration from the pilgrims, collect materials etc. per auction terms. |
| (iii) | Income from advertisement space in print media: Income from sale of advertisement space in print media viz. Devaswom publications; |
| (iv) | Income from Form Sales: Income from sale of printed forms to the temple advisory committee aspirants; |
| (v) | Income from appointment of purohits: Fees collected from Purohits for appointing them to perform special rituals like ‘Vavubali’, and the Purohits in turn perform rituals for the believers and receives Dakshina from them; and |
| (vi) | Other Miscellaneous Supplies: Sales proceeds from stock & materials, wooden logs & building materials, hire of elephants and elephant paraphernalia etc. |
And also not discharging reverse charge liability on expenses under the head
| (vii) | Legal Charges: Charges paid to individual advocate(s) including senior advocate(s) for their services by way of representational services or to firm(s) of advocates for their services by way legal services.” |
3. Subsequently, as the petitioner had some doubts with respect to the taxability in respect of the income received by the petitioner in respect of certain transactions, Ext.P4 application was submitted by the petitioner before the 3rd respondent, seeking an advance ruling as contemplated under Section 98 of the CGST Act. The contentions raised in Ext.P4 are as follows:
| (i) | Auction process of rice from offerings: Offerings of rice from devotees would be accumulated in the temple premises, especially in Sabarimala, is a serious issue, which makes difficulties for the devotees for further offering and also raises hygiene problems. The rice sold on a daily auction process at temples like Sabarimala is impractical. In order to overcome this issue, the applicant chooses an auction or tender process for selecting persons for a particular period. The person, who is selected through auction, is responsible for collecting the offerings with pre-quoted rate. The applicant submits that a major portion of the offerings is mixed rice, that are disposed in an unpackaged loose form and hence it does not attract GST. The auction is only a method of ascertaining a higher price for the rice and it will not be liable to GST even if it sold through auction. Therefore, the same of weighed and unpacked rice within the above context, falls outside the purview of GST. |
| (ii) | Auction of broken coconuts: Devotees’ offerings of coconut or broken coconut collected from temples under the jurisdiction of the petitioner is also given to persons, who were selected through tender or auction process. It is practically impossible to conduct daily weighing and auctions of these remnants. Hence the applicant selected persons over a period through tender process and charged a lump-sum value for the collection of coconuts accumulated from offerings of devotees at temples including Sabarimala and Pamba Devaswom. |
| (iii) | Transfer of right to collect the cloths left by devotees in Pambariver: Devotees leave their clothes in Pamba river while bathing as part of rituals. The applicant provides the transfer of rights to manage these clothes to a person, who is selected through a competitive tender process. The applicant’s aim is to protect the river from such waste materials and maintain the purity of the river water. (the query was whether the above transaction is taxable). |
| (iv) | Auction or tendering of agricultural produce: Agricultural produce, specifically the yield from coconut palm is auctioned on the basis of annual estimated price, which is made of the value of the agricultural produce. It is impractical to conduct routine auctions Jor the agricultural produce and hence the right to collect and manage this produce is transferred to an individual through the auction process. (The query was whether the above transaction is taxable). |
| (v) | GST liability on honorarium and sitting fees paid to President and other members: The applicant is an autonomous body, established under the Travancore- Cochin Hindu Religious Institutions Act 1950 and it does not possess a corporate status. Hence the liability of GST on honorarium, sitting fees or any other payments made to the president and other members of the board in the form of reverse charge mechanism (RCM) may be clarified. |
| (vi) | GST liability on advocate fees or legal fees: As explained above, the applicant does not possess a definite corporate status (like a company) and therefore it needs to explicit the liability for the payment of GST on expenditures like advocate fees and legal fees. Tax payments on such types of expenditures are typically carried out under RCM, since the suppliers of services are unregistered persons. (vii)Taxability_on_Transfer of right to perform Pulluvan Pattu_and Balithara at temples through auction process: Pulluvan Pattu and Balithara are the religious customs and rituals, performed by qualified priests or prominent religious figures (Acharyan). These activities are the sacred rituals and sacrificial ceremonies. performed under the temple jurisdiction, which are considered as integral part to the religious beliefs by devotees. The applicant selects the qualified person to perform these activities: through a competitive tender process and transfer the right annually. During the course of these rituals, devotees provide monetary contributions to the priest typically in the form of donations, which is not accompanied by any formal receipts or documents. |
| (viii) | GST on transfer of right to provide public toilets and bathrooms to devotees through annual auction or tender process: The applicant provides essential amenities such as public toilets and wash rooms, primarily at major temples like Sabarimala, Pamba, Nilakkal, etc. In order to provide these services along with proper maintenance of the associated infrastructure, the right to manage these services are transferred on an annual basis to individuals or institutions through competitive tender or auction process. The important aspect is, these 11. services are exclusively intended for the use of devotees visiting the temples for religious purposes, which are entirely different from the nature of public comfort stations. |
| (ix) | GST liability on transfer of right to sale pooja items in the precincts of temples through tender or auction: The applicant submits that the supply of pooja materials to the devotees is an auxiliary for religious offerings, but they not directly sell such items in temple premises. In order to provide the pooja items. which are readily available to the devotees in the temple precincts, the applicant finds an appropriate person for a specified period through auction process. The highest bidder will setting up stalls for selling the materials in the forecourts of the temple. The applicant shall provide necessary infrastructure for the establishment and maintenance of these stalls. |
4. However, Ext.P4 application submitted by the petitioner was rejected by the 3rd respondent as per Ext.P5, without considering the same on merits, on the ground that, the questions raised in the application were already pending in proceedings against the investigation by the Central GST Intelligence. This writ petition is submitted by the petitioner in such circumstances challenging Ext.P5.
5. I have heard, Sri. S Vishnu (Arikkattil), the learned counsel appearing for the petitioner, Sri.Arun Ajay Shankar, the learned Government Pleader for the respondent and Sri.P.T Dinesh, the learned Standing Counsel appearing for the 4th respondent.
6. The specific contention raised by the learned counsel for the petitioner is that, the refusal to exercise the jurisdiction vested upon the 3rd respondent, by invoking the proviso to Section 98 (2) is not at all proper. It is pointed out that, apparently, the reason mentioned in Ext.P5, refers to Ext.P3 order, which cannot be considered as a reason to attract the proviso to Subsection (2) of Section 98 of the Act. According to the learned Counsel for the petitioner, as far as Ext.P3 order is concerned, no conclusions were arrived at on merits and instead, the proceedings were closed taking note of the fact that the petitioner remitted the tax.
7. On the other hand, the learned Government Pleader as well as the learned Standing Counsel for the 4th respondent opposed the said contentions.
8. After considering the relevant statutory provisions and Ext.P5 order, I find merits in the contention put forward by the learned counsel for the petitioner. Of course, it is true that, the reason mentioned in Ext.P5 is that, the questions raised by the petitioner is pending before the Central GST Intelligence and it is apparently with reference to the matters covered as per Ext.P3. Evidently, while issuing Ext.P5, the Ext.P3 order was not brought to the notice of the 3rd respondent authority, and therefore the fact that the Ext.P3 proceedings were already concluded, was not within the knowledge of the 3rd respondent authority. Now it is evident from Ext.P3 that, none of the legal aspects relating to the taxability of the transactions referred to therein were considered on merits and instead, the proceeding itself was closed, taking note of the fact that the petitioner remitted the tax. As far as the proviso to Sub Section (2) Section 98 is concerned, the advance ruling authority can take a decision not to exercise the jurisdiction, only if the said question is already pending or decided in any proceeding in the case of an applicant under any of the provisions of the Act. The specific case of the petitioner is that, apart from Ext.P3, no other proceedings are pending or decided by any of the statutory authorities touching upon the questions raised in Ext.P4 application. On going through Ext.P3 also, it can be seen that none of the questions were decided on merits. Therefore, under no circumstances, Ext.P3 could be a reason, for which, the 3rd respondent can avoid the invocation of the jurisdiction vested up on it under Section 98 of the Act. It is also the case of the petitioner that, the questions raised in Ext.P4 are completely different from those referred to in Ext.P3 as well. In such circumstances, I am of the view that, Ext.P5 requires interference and the matter needs to have a reconsideration.
In such circumstances, this writ petition is disposed of, quashing Ext.P5, with a direction to the 3rd respondent, to reconsider Ext.P4 application, dehors Ext.P3 order, and to consider the same on merits. Such a decision shall be taken within a period of three months from the date of receipt of a copy of this judgment after giving the petitioner an opportunity for being heard. It is clarified that, it shall be open to the 3rd respondent to invoke the proviso to Sub Section (2) of Section 98 of the CGST Act, if there are other reasons than Ext.P3.