Page 115 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : TARUN REALTORS PVT. LTD. 441
All the above-mentioned installations are used, directly or indirectly, for making
outward supply of services (i.e. lease rentals.)
6. The appellant sought advance ruling in respect of the following
question :
Whether taxes paid on procurement of goods and/or services for instal-
lation of the following, are regarded as blocked credits under Section
17(5) of the CGST Act, 2017?
(a) Chillers, (b) Air Handling Unit (AHU), (c) Lift, Escalators and Travel-
lator, (d) Water Treatment Plant (WTP), (e) Sewage Treatment Plant
(STP), (f) High Speed Diesel Yard (HSD), (g) Mechanical Car Park
(MLCP), (h) Indoor/Outdoor Surveillance System (CCTV), (i) D.G.Sets,
(j) Transformers, (k) Electrical wiring and fixtures (l) Public Health Engi-
neering (PHE), Fire-fighting and water management pump system.
7. The Authority for Advance Ruling vide Order No. KAR ADRG
103/2019, dated 30th Sept., 2019 held that “the taxes paid on procurement of goods
and/or services for installation of the [Instruments] as listed in the application are re-
garded as blocked credits under Section 17(5) of the CGST Act, 2017”.
8. Aggrieved by the said ruling, the appellant has filed this appeal on
the following grounds.
8.1 On a conjoint reading of the provisions of Section 17(5)(d) of the
CGST Act and the definition of “Plant and Machinery” as given in the explana-
tion to Chapter V and Chapter VI of the said Act, it can be deduced that the taxes
paid on goods or services received for construction of plant or machinery on
one’s own account is available as input tax credit and is not blocked under Sec-
tion 17(5) of the CGST Act.
8.2 On application of Rule of literal interpretation of statutes, the appel-
lant submitted that the explanation to Chapter V of the CGST Act i.e “Plant and
Machinery” cannot be applicable to the phrase “Plant or Machinery” used in Sec-
tion 17(5) of the said Act. Although the phrase “Plant and Machinery” is defined
under the GST laws, the phrase “Plant or Machinery” has not been defined; that
Section 17(5) uses the phrase “Plant or Machinery”, which has not been defined
under the GST laws; that therefore, references must be drawn from the diction-
ary meanings ascribed to it under other laws and judicial pronouncements.
8.3 The appellant submitted that as per the Law Lexicon, “Plant”
means the fixtures, machinery, tools, apparatus, appliances, etc., necessary to
carry on any trade or mechanical business, or any mechanical operation or pro-
cess. “Machinery” means something more than a collection of ordinary tools. It
means more than a solid structure built upon the ground, whose parts either do
not move at all or if they do move the one with or upon the other in interde-
pendent action with the object of producing specific and definite results.
8.4 The appellant relied on the following judicial pronouncements
which attempt to determine whether an item is a ‘machinery’ or not and to justi-
fy their case that all the installations of the appellant qualify as “Plant” or “Ma-
chinery” :
(a) Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Mu-
nicipality - AIR 1922 PC 27
(b) Industrial Machinery Manufacturers Pvt. Ltd. v. State of Gujarat - 16
STC 380.
(c) Ambica Wood Works v. State of Gujarat - 43 STC 338
GST LAW TIMES  23rd April 2020  235