The Gujarat Appellate Authority for Advance Ruling (GAAAR) has dismissed an appeal by I-Tech Plast India Pvt. Ltd. and upheld the Gujarat Authority for Advance Ruling’s (GAAR) decision to declare a 2021 advance ruling “void ab initio” for failure to disclose DGGI inquiry.
The case stems from the company’s application to GAAR in November 2020 seeking clarity on the GST classification and applicable rate for its plastic toys, as well as eligibility to claim input tax credit (ITC) on certain debit notes. GAAR’s January 2021 ruling classified the toys under HSN code 95030030, attracting 12% GST (6% CGST + 6% SGST), and denied ITC claims for earlier years.
However, subsequent revelations showed that the Directorate General of GST Intelligence (DGGI), Pune, had already initiated inquiries into the company’s tax practices before the ruling was sought. In September 2020, DGGI issued communications over alleged misclassification of goods, leading the company to pay ₹2.19 crore in IGST and ₹40.87 lakh in interest for FY 2019–20, and to revise its tax rate to 18% from October 2020. These developments were never disclosed to GAAR.
Following this, GAAR invoked Section 104 of the CGST Act to declare the January 2021 ruling void, citing suppression of material facts. The company appealed, arguing that no formal “proceedings” were pending at the time—only an “investigation”—and that disclosure was therefore unnecessary.
GAAAR rejected these arguments, noting that payments and rate revisions clearly indicated that the company was acting on DGGI’s findings. The non-disclosure was material, as the facts were directly linked to the classification question posed to GAAR. The law requires applicants to reveal any pending or decided matters related to their application, regardless of whether they are labeled “investigation” or “proceedings.”
The authority also dismissed jurisdictional objections against DGGI Pune, pointing to notifications granting nationwide authority to DGGI officers. It further observed that the company’s reliance on various case laws was misplaced, as none dealt with Section 104 of the CGST Act in similar factual circumstances.
With this decision, GAAAR affirmed that I-Tech Plast India’s advance ruling of January 20, 2021, stood void from inception, effectively treating it as if it had never been issued.
Ruling Details
Appellant’s Name: I-Tech Plast India Pvt. Ltd.
Ruling Date: 31.7.2025
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