GST Advance Ruling Rejected If Tax Case Is Already Pending
The Andhra Pradesh tax authority rejected an advance ruling application because the business already had ongoing tax proceedings on the same issue.
- Ruling
- Order /AAR/AP/02(GST)/2018 dated 20.04.2018
- Dated
- 20 Apr 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- A business asked for the GST rate on extra neutral alcohol.
- The authority rejected the application without deciding the tax rate.
- Tax officers had already started proceedings on the same issue.
- A writ petition was also pending before the High Court.
- Law bars advance rulings when the issue is already under legal examination.
In short
A manufacturer asked for the Goods and Services Tax (GST) rate on grain-based extra neutral alcohol (ENA). However, local GST officers had already initiated tax proceedings against the company on this exact question, and a court case was also pending.
What has changed
How it worked before
Businesses often assumed they could file for a GST advance ruling at any point to get clarity, even if tax officers were already auditing or questioning them on that issue.
What has changed
In order AAR/AP/02(GST)/2018, the Authority for Advance Ruling (AAR) confirmed it cannot accept an application if the tax department or a court is already handling the same issue for that business. The authority dismissed the application under Section 98(2) of the CGST Act without deciding the actual GST rate on extra neutral alcohol.
Who this affects
Any business facing a GST audit, inquiry, or court case that is considering applying for an advance ruling on the same topic.
An example
A distillery in Andhra Pradesh receives a notice from its local GST officer questioning the tax rate on its alcohol products. To avoid a penalty, the distillery files an application with the Authority for Advance Ruling (AAR) asking for the correct tax slab for the exact same product. Based on this ruling, the AAR will reject the application immediately because the tax officer had already started proceedings. The distillery must resolve the tax rate question within the ongoing tax proceedings instead.
What you should do
Do not apply for an advance ruling if tax officers have already raised notices or started proceedings on that issue. Remember that an advance ruling applies only to the applicant, but the rule blocking applications during pending cases applies across India.
If you do nothing
Applying for an advance ruling while a tax notice or court case is pending wastes time and application fees. The authority will reject the application without giving an answer on the tax rate. Businesses must defend their position in the existing proceedings rather than trying to use an advance ruling as a shortcut.
The terms explained
- advance ruling
- An official decision given by tax authorities to a business clarifying how GST law applies to a specific transaction.
- extra neutral alcohol
- A high-purity alcohol made from grain or molasses, commonly used as a raw material to make alcoholic drinks and pharmaceuticals.
- jurisdictional officer
- The specific GST officer assigned to supervise and assess a business's tax compliance.
The ruling in detail
Authority for Advance Ruling
M/s Crux Bio Tech India Private Limited
Order /AAR/AP/02(GST)/2018 dated 20.04.2018 · Andhra Pradesh
Questions before the authority
- The grain based extra neutral alcohol, which slab under comes in GST tax system. Is this comes under 18% or exempted or any other taxes category?
Facts
The applicant is engaged in the manufacturing of grain-based extra neutral alcohol (ENA). They filed an application seeking clarification on the applicable GST tax rate, exemption status, or tax category for grain-based ENA. However, proceedings on the same issue were already pending with the jurisdictional officer, and the applicant had also filed a writ petition before the High Court.
Ruling
The Authority for Advance Ruling **rejected the application for advance ruling** under Section 98(2) of the CGST/APSGST Act, 2017. The application failed to meet the pre-requisites for admission because the subject issue was **already pending in proceedings** before the jurisdictional tax authority and the High Court.
Reasoning
Under the proviso to Section 98(2) of the CGST Act, 2017, the Authority shall not admit an application where the question raised is already pending or decided in any proceedings in the applicant's case under any provisions of the Act. Remarks from the jurisdictional officer confirmed that proceedings against the applicant were initiated well before the filing of the advance ruling application. Additionally, the applicant admitted to filing a writ petition on the same issue before the Hon'ble High Court of Judicature at Hyderabad, which remained pending for disposal.
Provisions relied on
- Section 98(2) of CGST Act, 2017
- Section 98(2) of APSGST Act, 2017
For the practitioner
This order highlights the **strict statutory bar under Section 98(2)** against entertaining advance ruling applications when the identical issue is already pending before tax authorities or courts. It **does not decide the GST rate or taxability** of grain-based extra neutral alcohol on merits.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/ap_02-2018_20-04-18_crux_bio_tech.pdf
Legibility of the scan, as read: high.
Prepared 17-10-2026.
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