Horizen Edge Technologies Pvt. Ltd. (2025-VIL-211-AAR)

The West Bengal Authority for Advance Ruling in a significant ruling has held that an advance ruling obtained by an original entity which has been overtaken by a newly incorporated entity to overtaken original entity as a going concern shall not be applicable to the newly incorporated entity.

Horizen Edge Technologies Pvt. Ltd. (‘Applicant’) was incorporated with an intent to overtaking the operations of M/s Horizen- A proprietorship concern.

Pursuant to incorporation of Horizen Edge Technologies Pvt. Ltd., The Applicant sought an advance ruling on the taxability of the transfer of the business on a going concern basis to the applicant. Applicant further raised a question as to whether the taxability of the transactions entered into by the original entity which has been overtaken would remain same, or will there be any change in the taxability?

The West Bengal Authority for Advanced Ruling, relying upon the provisions of Section 103(1) held that the advance ruling pronounced by the Authority earlier, was applicable only on the original entity i.e. person who has sought the advance ruling and the Concerned Jurisdictional Officer in respect of the applicant.

In view of the above, the Authority for Advance Ruling held that the ruling obtained erstwhile (i.e., by original entity) shall not be applicable on the new concern which has overtook the original entity.

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Did you also witness changes in rates of goods and services supplied by you?

If yes, this obligates fulfillment of various compliance requirements and appropriate reflection of due compliance in GST returns.

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The article can be accessed on Taxmann through the following link:

https://www.taxmann.com/research/gst-new/top-story/105010000000027190/gst-mega-revamp-how-to-reflect-compliance-in-gst-returns-experts-opinion

NCS Pearson v. State of Karnataka
2025-VIL-969-KAR

Summary
The Appellant filed an application for advance ruling in relation to classification of services as OIDAR services.

The Authority for advance ruling decided the matter party in the favour of the petitioner. Aggrieved by the same, the respondent filed an appeal before Appellate Authority for advance ruling where the question was answered in the favour of revenue.

Aggrieved by the ruling by the Appellate Authority, Petitioner filed a writ petition before the High Court.

Pending such writ, the respondents issued a notice under section 74 of CGST Act alleging short payment of tax on such services by the reason of fraud or any wilful statement or suppression of facts. Aggrieved by the same, the Petitioner preferred a writ before the High Court.

After due consideration to the submissions made by the Petitioner, the Court has observed that SCN issued by the Respondent is illegal and arbitrary being manifestly violative of the law for want of satisfaction of the jurisdictional facts contemplated in Section 74 of the CGST Act and that the impugned show cause notice is wholly without jurisdiction or authority of law as the foundational jurisdictional facts to trigger / invoke Section 74 of the CGST Act i.e., existence of wilful suppression to evade / avoid payment of GST has not been satisfied by the respondents and the impugned show cause notice deserves to be quashed.

Accordingly, the Court quashed the SCN issued by the Respondents being SCN issued wholly without Jurisdiction.

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