Section 104 of CGST Act - Advance Ruling to be Void in Certain Circumstances
Section 104 of the Central Goods and Services Tax Act, 2017 deals with an advance ruling obtained by fraud, suppression of material facts or misrepresentation of facts. In such a case, the competent advance ruling authority may declare the ruling void ab initio, subject to an opportunity of being heard.
Updated text of Section 104 of the CGST Act
104. Advance ruling to be void in certain circumstances.
(1) Where the Authority or the Appellate Authority or the National Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of section 101 or under section 101C has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant or the appellant as if such advance ruling had never been made:
Provided that no order shall be passed under this sub-section unless an opportunity of being heard has been given to the applicant or the appellant.
Explanation. The period beginning with the date of such advance ruling and ending with the date of order under this sub-section shall be excluded while computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74 or sub-sections (2) and (7) of section 74A.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant, the concerned officer and the jurisdictional officer.
For authoritative statutory text and amendment footnotes, refer to the official India Code version of the CGST Act.
What Section 104 means
An advance ruling ordinarily has the binding effect described in Section 103 of the CGST Act. Section 104 creates an important exception. If the ruling was secured through fraud, suppression of material facts or misrepresentation of facts, the authority that pronounced the ruling may declare it void from the beginning.
The expression void ab initio means that the ruling is treated as invalid from its inception. Once such an order is passed, the CGST Act and the rules apply to the applicant or appellant as though the advance ruling had never existed.
When can an advance ruling be declared void?
Section 104 is attracted when the competent Authority, Appellate Authority or National Appellate Authority finds that the advance ruling was obtained through one or more of the following circumstances:
| Ground | Practical meaning in Section 104 |
|---|---|
| Fraud | The ruling was procured through dishonest or deceptive conduct affecting the basis on which the ruling was given. |
| Suppression of material facts | Relevant facts capable of affecting the ruling were withheld from the authority. |
| Misrepresentation of facts | Material factual information was presented inaccurately or misleadingly to obtain the ruling. |
The provision is not a general power to reopen an advance ruling merely because a different legal view is later preferred. Section 104 specifically links the power to the manner in which the ruling was obtained.
Opportunity of being heard is mandatory
The proviso to Section 104(1) expressly protects procedural fairness. An order declaring an advance ruling void cannot be passed unless the applicant or appellant has first been given an opportunity of being heard. This safeguard allows the affected person to answer the allegation of fraud, suppression or misrepresentation before the ruling is nullified.
Exclusion of time for Sections 73, 74 and 74A
The Explanation to Section 104 excludes the period from the date of the advance ruling up to the date of the order declaring it void while computing the specified limitation periods under Section 73, Section 74 and Section 74A.
Section 74A, introduced into the CGST Act for determination of tax not paid or short paid, tax erroneously refunded, or input tax credit wrongly availed or utilised for the financial year 2024-25 onwards, is now expressly included in the Section 104 Explanation. The relevant reference is to sub-sections (2) and (7) of Section 74A.
Key takeaways
- An advance ruling may be declared void from the beginning if it was obtained by fraud, suppression of material facts or misrepresentation of facts.
- The affected applicant or appellant must be given an opportunity of being heard before such an order is passed.
- After the ruling is declared void, the Act and rules apply as if the ruling had never been made.
- The specified period between the ruling and the voiding order is excluded for limitation purposes under Sections 73, 74 and 74A.
- A copy of the order must be sent to the applicant, concerned officer and jurisdictional officer.