Rajasthan HC Expunges AAAR's ITC Remarks for Overstepping Appeal Scope in GST Valuation Case
The Rajasthan High Court has pulled up the Appellate Authority for Advance Ruling (AAAR) for exceeding its jurisdiction by commenting on Input Tax Credit (ITC) in a matter where it was not under challenge.
The bench of Justice Avneesh Jhingan and Justice Anand Sharma was hearing a plea by Jaipur-based petitioner Tej Jain, who had originally approached the GST Authority for Advance Ruling (AAR) seeking clarification on the valuation of refurbished used cars under Notification No. 08/2018-Central Tax (Rate). While the AAR ruled against Jain, the AAAR upheld that decision but went a step further by including observations on ITC availability—an issue never raised in the initial proceedings or appeal.
Terming it an overreach, thebench, in an order dated May 30, 2025, expunged Paragraph 6.8 of the AAAR ruling, which discussed ITC conditions.
The dispute originated from an advance ruling application filed by Jain, who sought clarity on whether amounts paid for purchasing and refurbishing used cars could be included in the purchase price when computing the taxable margin under Notification No. 08/2018-Central Tax (Rate), dated January 25, 2018. The Authority for Advance Ruling (AAR) had ruled against Jain, a decision later upheld by the AAAR.
The High Court found merit in Jain's contention that the AAAR had overstepped its jurisdiction by making observations on ITC — an issue not raised before the AAR or on the grounds of appeal. The court noted that the appellate authority’s comments on the availability of ITC under the notification went beyond the limited question of valuation posed by the petitioner.
Case Details
Case Title: Mr. Tej Jain Versus Chief Commissioner Of Cgst
Case No.: D.B. Civil Writ Petition No. 12624/2022
Date: 30/05/2025
Counsel For Petitioner: Jatin Harjai
Counsel For Respondent: Kinshuk Jain
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
