Procedure on receipt of application

Section 98 — PROCEDURE ON RECEIPT OF APPLICATION

BLOCK 1 — VERBATIM TEXT

Marginal note — Procedure on receipt of application

BLOCK 2 — STATUTORY MAP

BLOCK 3 — COMMENTARY

1. The procedural framework — overview

Section 98 establishes the comprehensive procedural framework for AAR proceedings from application receipt through ruling pronouncement. The framework operates through seven sub-sections covering: (a) forwarding to concerned officer; (b) admission / rejection decision; (c) communication of admission/rejection; (d) substantive ruling process; (e) member disagreement reference to AAAR; (f) 90-day timeline; (g) ruling communication.

The procedural design reflects the quasi-judicial character of AAR — adversarial procedure with applicant and Department both represented; substantive engagement with arguments; reasoned admission/rejection; reasoned substantive ruling; communication to all affected parties. Natural justice principles operate throughout — hearing before adverse action, reasoned orders, fair opportunity for both sides.

2. Sub-section (1) — forwarding to concerned officer

Sub-section (1) provides for Departmental involvement from application receipt. On receipt of application, Authority forwards copy to the concerned officer (jurisdictional officer of applicant). May call for records if necessary for adjudication. Records to be returned as soon as possible.

Operational consequences:

• Departmental notification — Concerned officer becomes aware of AAR proceedings against applicant from the start.

• Departmental positioning — Concerned officer can take a substantive position on the question. May be unfavourable to applicant; ensures Government revenue interest.

• Records availability — Where AAR needs Departmental records for adjudication, the framework supports access. Records returned timely.

• Operational coordination — AAR and concerned officer coordinate procedurally; substantive hearing requires both parties.

3. Sub-section (2) — admission / rejection decision

Sub-section (2) provides for the admission decision — a critical gatekeeping stage. The Authority, after examining application + records + hearing applicant + concerned officer, may by order admit or reject the application. Three provisos establish key parameters:

• First proviso — pending / decided bar — Authority SHALL NOT ADMIT where question is pending or decided in the applicant's case under any Act provisions.

• Second proviso — hearing before rejection — No rejection without opportunity of hearing. Natural justice at admission stage.

• Third proviso — reasoned rejection — Rejection order must specify reasons. Reasoned-order doctrine applies at admission stage.

The admission stage filters applications for jurisdictional compliance and procedural appropriateness. Properly prepared applications with no pending dispute issues typically secure admission; problematic applications face rejection.

4. The pending / decided question bar — first proviso

The first proviso is operationally critical. The Authority SHALL NOT ADMIT the application where the question raised is ‘already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act’. Key elements:

• ‘Pending in any proceedings’ — Includes (i) ongoing audit under s. 65/66; (ii) issued SCN under s. 73/74; (iii) ongoing investigation by DGGI/Anti-Evasion; (iv) pending appeal under s. 107/112; (v) writ petition. Any active proceeding on the question.

• ‘Decided in any proceedings’ — Includes (i) prior adjudication order on the question; (ii) prior advance ruling on the same question; (iii) settled appellate determination. Closed proceedings establishing position.

• ‘In the case of an applicant’ — Applicant-specific bar. Same question in another taxpayer's case does not bar; only applicant's own pending/decided proceedings.

• ‘Under any of the provisions of this Act’ — Wide scope; covers any proceeding under CGST Act.

Practitioner approach: Before filing AAR, verify (a) no pending proceeding on the same question; (b) no prior decision on the same question. Where there is a related but distinct question, careful framing may distinguish. Where pending proceedings exist, AAR is not the route; standard adjudication / appellate framework applies.

5. Sub-sections (3) and (7) — communication framework

Sub-sections (3) and (7) establish the communication framework:

• Admission/rejection order — to applicant + concerned officer — Procedural status communicated to both parties.

• Substantive ruling — to applicant + concerned officer + jurisdictional officer — Triple communication ensures all affected parties have ruling. Signed by members; certified per prescribed manner.

• ‘Jurisdictional officer’ — Officer with general jurisdiction over applicant's location/registration. May be distinct from concerned officer specifically participating in proceedings. Both informed of ruling.

Practical significance: Communication to jurisdictional officer ensures Departmental field officers are aware of binding ruling for applicant's operations. Supports compliance with s. 103 binding effect.

6. Sub-section (4) — substantive ruling process

Sub-section (4) provides for the substantive hearing and ruling process on admitted applications:

• Examination of further material — Beyond initial application, additional material may be placed by applicant or obtained by Authority. Comprehensive factual base for ruling.

• Opportunity of being heard — Both applicant AND concerned officer (or authorised representatives) heard. Adversarial structure; substantive engagement.

• Pronouncement of advance ruling — On the question specified in the application. Substantive determination.

Practitioner approach: Personal hearing is the substantive engagement opportunity. Comprehensive preparation, counsel engagement, articulation of position essential. Department's participation through concerned officer creates adversarial dynamic; preparation should anticipate Departmental counter-arguments.

7. Sub-section (5) — member disagreement and AAAR reference

Sub-section (5) provides the operative resolution mechanism for member disagreement. Where AAR members DIFFER on any question:

• State points of difference — Members identify the specific question(s) on which they disagree. Procedural documentation.

• Reference to AAAR — Reference made to the Appellate Authority for hearing and decision on the disputed question. AAAR effectively takes over the resolution.

• AAAR's resolution — AAAR (two-member appellate body) considers the disputed question. AAAR's two members typically reach unanimous resolution given senior level.

• Effect on overall application — On AAAR's resolution, the matter completes. The resolution by AAAR substitutes for unanimous AAR ruling.

Operational reality: Member disagreement is rare for routine questions. Occurs for genuinely contestable interpretive issues where Central and State perspectives may legitimately differ. The reference mechanism ensures the framework can complete proceedings despite split benches.

8. Sub-section (6) — 90-day timeline

Sub-section (6) provides the statutory timeline — 90 days from date of receipt of application for AAR to pronounce the ruling. The timeline:

• Statutory benchmark — 90 days operational target. AAR proceedings expected to conclude within this period.

• In practice extensions — While statute specifies 90 days, practical AAR operations often exceed this for complex matters. Extensions are common; not formally bar.

• Member disagreement scenarios — Where AAAR reference is required (sub-s. (5)), the 90-day timeline is effectively extended for AAAR resolution.

• Practitioner expectation — 90-day timeline supports planning; complex matters may take longer. Track ruling timeline; engage with AAR for updates if substantially delayed.

9. Departmental View from CBIC Handbook of GST Law and Procedures (DGGST, 2024)

The CBIC Handbook (Chapter XI on Advance Ruling) addresses s. 98 as the procedural backbone of AAR proceedings. The Handbook directs concerned officers to participate substantively in AAR proceedings — represent Departmental position, provide relevant records, engage in hearings.

On the pending/decided bar, the Handbook emphasises strict application. AAR jurisdiction is forward-looking; pending or completed adjudication takes precedence over AAR proceedings. Practitioners should verify status before filing.

On member disagreement, the Handbook acknowledges the rare but operationally important scenario. AAAR reference mechanism ensures completion; the framework should not stall due to split AAR benches.

On 90-day timeline, the Handbook acknowledges practical extensions for complex matters. While 90 days is the statutory target, complex interpretive matters may legitimately require longer; reasoned extension by AAR is supported.

On communication framework, the Handbook directs comprehensive communication to applicant, concerned officer, and jurisdictional officer. Supports s. 103 binding effect; ensures field officers aware of binding rulings.

CIRCULARS, INSTRUCTIONS & NOTIFICATIONS

• Rule 103 of CGST Rules dated Statutory — Qualification and appointment of AAR members. Rule 103 — qualification framework for AAR members. Operative content: (i) Two members — one Central tax officer not below joint commissioner; one State / UT tax officer not below joint commissioner; (ii) Appointment by Government notification; (iii) Tenure as specified in appointment. Supports s. 98 framework by ensuring proper Authority constitution.

• Rule 104 of CGST Rules dated Statutory — Application procedure — operationalises s. 98(1) framework. Rule 104 — operative application framework. FORM GST ARA-01 specifications, fee payment, supporting documents. Provides procedural foundation for s. 98 proceedings.

• Rule 105 of CGST Rules dated Statutory — Certification of ruling copies. Rule 105 — certification of advance ruling copies. Specifies the certification manner under s. 98(7) — duly signed by members and certified for authentic communication to applicant, concerned officer, jurisdictional officer.

• Section 100 of the CGST Act, 2017 dated Statutory — Appeal to AAAR — companion to s. 98(5) reference. Section 100 provides for appeal from AAR ruling to AAAR. Sub-s. (5) of s. 98 has an internal reference mechanism (for member disagreement) that operates within AAR proceedings. Section 100 provides post-ruling appellate framework for adverse rulings. Both mechanisms support the framework's completeness.

• Section 103 of the CGST Act, 2017 dated Statutory — Applicability / binding nature of advance ruling. Section 103 — binding nature of advance ruling. Binds (a) applicant; (b) concerned officer; (c) jurisdictional officer. Section 98(7) communication framework supports s. 103 effect — ensures binding effect through formal communication.

PROCEDURE — STEP-BY-STEP

Step 1: AAR receives application

Application filed in FORM GST ARA-01 through GSTN portal. AAR receives and acknowledges; reference number assigned.

Step 2: Forwarding to concerned officer — sub-s. (1)

Authority forwards copy to jurisdictional officer of applicant. Requests records if needed. Concerned officer aware of proceedings from initiation.

Step 3: Records request and return — first proviso to sub-s. (1)

Where records needed, AAR requests from concerned officer. Records returned to officer as soon as possible. Standard framework.

Step 4: Examination of application — sub-s. (2)

AAR examines application — (a) jurisdictional compliance (within s. 97(2) seven categories); (b) procedural compliance (fee paid, form complete, supporting docs); (c) admission criteria (no pending / decided proceeding on same question).

Step 5: Hearing on admission

AAR hears applicant and concerned officer on admission. Substantive engagement at this stage on procedural and jurisdictional issues. Hearing precedes admission/rejection decision per second proviso.

Step 6: Pending / decided question check — first proviso

AAR verifies whether question is already pending or decided in applicant's case under any Act provisions. If yes — application must be rejected under first proviso. If no — application may be admitted.

Step 7: Admission or rejection order

AAR issues reasoned order — admitting or rejecting application. Reasons specified if rejected (third proviso). Hearing given before rejection (second proviso).

Step 8: Communication of admission/rejection — sub-s. (3)

Copy of order sent to applicant and concerned officer. Both parties informed of procedural status.

Step 9: Substantive material — sub-s. (4)

On admission, applicant places further material as needed. AAR may obtain additional material. Comprehensive factual record.

Step 10: Personal hearing on substantive issue — sub-s. (4)

Substantive hearing on the merits of the question. Applicant and concerned officer participate. Multiple sittings may be needed for complex matters.

Step 11: Member deliberation

Two AAR members deliberate on the question. Aim for unanimous ruling. Where unanimous, proceed to ruling pronouncement.

Step 12: Member disagreement — sub-s. (5)

If members differ, state points of disagreement; refer to AAAR for resolution. AAAR conducts further proceedings to resolve disputed question.

Step 13: Ruling pronouncement within 90 days — sub-s. (6)

AAR pronounces ruling within 90 days from application receipt. Extensions for complex matters. Ruling on the substantive question.

Step 14: Communication of ruling — sub-s. (7)

Signed and certified copy sent to (a) applicant; (b) concerned officer; (c) jurisdictional officer. Triple communication ensures all parties have binding ruling.

Step 15: Post-ruling implementation and appeal options

Applicant evaluates ruling for implementation. If favourable — operational implementation. If unfavourable — appeal under s. 100 within 30 days.

PRACTITIONER CHECKLIST

WORKED EXAMPLES

PRACTITIONER PLANNING

• Pre-filing verification — no pending / decided proceedings on same question.

• Concerned officer engagement — anticipate Departmental participation; substantive position.

• Admission stage preparation — procedural compliance, hearing engagement.

• Substantive hearing comprehensive preparation — counsel, documents, arguments.

• Adversarial dynamic management — engagement with Departmental position.

• Member disagreement contingency — AAAR reference framework awareness.

• 90-day timeline tracking with practical extension expectations.

• Communication verification — ensure ruling reaches concerned and jurisdictional officers.

• Implementation strategy for favourable ruling.

• Appeal under s. 100 readiness for unfavourable scenarios.

LITIGATION DEFENCE — KEY ATTACK POINTS

• Pending / decided question verification — challenge wrongful rejection under first proviso.

• Hearing before rejection — second proviso natural justice; challenge unreasoned rejection.

• Reasoned rejection orders — third proviso compliance per Whirlpool / Mafatlal lines.

• Substantive ruling reasoning — sub-s. (4) requires comprehensive ruling.

• Member disagreement reference — sub-s. (5) AAAR mechanism; substantive defence at AAAR.

• 90-day timeline — though directory not mandatory; document delays for any subsequent challenges.

• Communication framework — sub-s. (7) compliance essential for s. 103 binding effect.

• Procedural natural justice — hearing for both parties; reasoned orders.

• Writ remedy — for procedural / jurisdictional defects under Article 226.

• Voidness under s. 104 — defence against retroactive invalidation.

• Appellate framework under s. 100 — 30-day window after ruling.

• Implementation challenges — ongoing alignment verification.

CROSS-REFERENCES

• Section 95 — Definitions.

• Section 96 — Authority for Advance Ruling.

• Section 97 — Application for advance ruling.

• Section 99 — Appellate Authority for Advance Ruling.

• Section 100 — Appeal to Appellate Authority.

• Section 101 — Orders of Appellate Authority.

• Section 101A — National Appellate Authority.

• Section 102 — Rectification of advance ruling.

• Section 103 — Applicability of advance ruling.

• Section 104 — Voidness in certain circumstances.

• Section 105 — Powers of Authority.

• Section 106 — Procedure of Authority.

• Rule 103 — Qualification of AAR members.

• Rule 104 — Application procedure.

• Rule 105 — Certification of ruling copies.

• FORM GST ARA-01 — Application for advance ruling.

• FORM GST ARA-02 — Appeal to AAAR.

• Notification 9/2017-CT dated 28.06.2017 — Date of enforcement of s. 98.

• Article 226 of Constitution — writ jurisdiction for procedural / jurisdictional issues.

• Whirlpool Corporation v Registrar of Trade Marks (1998) 8 SCC 1 — reasoned-order doctrine.

• Mafatlal Industries v Union of India (1997) 5 SCC 536 — reasoned-order in tax matters.

• CBIC Handbook of GST Law and Procedures (DGGST, 2024) — Chapter XI on Advance Ruling.