2020 (3) TMI 982 - AAAR - GST

Condonation of delay in filing appeal - Time Limitation - Levy of GST - operation of logging - the operation is independent of the trees, whether planted by the Forest Department or which grew out of natural regeneration - intra-state supply or not - the goods are taken by the recipient after the supply is completed. HELD THAT - It is evident that this Appellate Authority being a creature of the statue is empowered to condone a delay of only a period of 30 days after the expiry of the initial period for filing appeal. As far as the language of Section 100 of the CGST Act is concerned, the crucial words are not exceeding thirty days used in the proviso to sub-section (2). To hold that this Appellate Authority could entertain this appeal beyond the extended period under the proviso would render the phrase not exceeding thirty days wholly otiose. No principle of interpretation would justify such a result. Therefore, we hold that we are not empowered to condone the delay of one day in filing this appeal. Since the appeal cannot be allowed to be presented on account of time limitation, the question of discussing the merits of the issue in appeal does not arise - Appeal is dismissed on the ground of limitation.

Issues Involved:

1. Whether the service of “logging” attracts GST under the CGST Act, 2017.
2. Tax implications for the sale of forest produce or other goods by the Karnataka Forest Department when the buyer is registered or based outside Karnataka.

Issue-wise Detailed Analysis:

Issue No. 1: GST on Logging Services

The appellant, a government department, performs logging operations involving the harvesting of trees planted or naturally regenerated under the management of the Karnataka Forest Department. The primary question was whether these logging services attract GST.

The Advance Ruling Authority ruled that logging services are taxable under the GST Acts, irrespective of whether the trees were planted by the Forest Department or grew naturally. The appellant contended that logging operations should attract a nil rate of tax under entry Sl.no. 24 of Notification No. 11/2017-Central Tax (Rate), which pertains to support services to agriculture, forestry, fishing, and animal husbandry. They argued that logging operations are part of forestry support services and should not be classified under manufacturing services, which attract higher GST rates.

The appellant emphasized that logging does not constitute manufacturing since it does not change the basic characteristics of the product. They argued that logging is an intermediary production process related to forestry, covered under entry No. 24, and should attract a nil rate of tax. They further claimed that the Advance Ruling Authority's decision was incorrect and not in harmony with the notification's wording.

Issue No. 2: Tax on Inter-State Sales

The second issue concerned the tax treatment for the sale of forest produce or other goods by the Karnataka Forest Department when the buyer is registered or based outside Karnataka. The Advance Ruling Authority ruled that such transactions are intra-State supplies attracting CGST and SGST, regardless of where the goods are taken by the recipient after the supply is completed.

Personal Hearing and Delay in Filing Appeal:

During the personal hearing, the appellant reiterated their submissions and argued that logging operations should be considered support services to forestry. They also sought condonation of delay in filing the appeal, citing the receipt of the advance ruling order on 05.10.2019 and filing the appeal on 04.12.2019, which they claimed was within the permissible period when excluding the date of receipt.

Discussion and Findings:

The appellate authority examined the delay in filing the appeal. The appeal was filed beyond the prescribed period of thirty days from the date of communication of the advance ruling order. The authority confirmed that the order was received on 04.10.2019, and the appeal was filed on 04.12.2019, one day after the condonable period of thirty days.

Citing various judicial decisions, the appellate authority held that they could not condone the delay beyond the permissible period. The Supreme Court's interpretation of similar provisions in other statutes confirmed that appellate authorities have no power to condone delays beyond the statutory period.

Conclusion:

The appellate authority dismissed the appeal on grounds of time limitation, without discussing the merits of the issues in appeal. The order emphasized the strict adherence to statutory timelines and the limited powers of the appellate authority to condone delays.

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