2021 (4) TMI 174 - HC - GST

Condonation of delay in filing an appeal before AAAR against the order of AAR - Doctrine of Merger - scope of time limitation under Income Tax Act and GST Act - Scope of Notification issued by the CBDT dated 03.04.2020 - Classification of services - royalty paid in respect of Mining Lease - HELD THAT - The undisputed facts of the case reveals that the petitioner on 27.08.2018 has filed an application in terms of section 97 of CGST Act, 2017 seeking a ruling on the questions in respect of payment of tax on the royalty paid in respect of the mining lease and the contributions made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) and an order was passed in respect of Advance Ruling on 21.09.2019. An appeal was preferred before the AAR on 22.06.2020 and the AAR has passed an order holding that the appeal is not maintainable - The statutory provisions governing the field provides for a remedy of appeal and the petitioner has preferred an appeal on 22.06.2020 and the AAAR has passed an order dismissing the appeal on 21.09.2020 which is impugned in the present writ petition. Notification issued by the CBDT dated 03.04.2020 is certainly not a Notification extending the period of limitation provided under the statute in respect of appeals. Reliance is also placed upon the judgment delivered by the Hon ble Supreme Court in the case of HIND WIRE INDUSTRIES LTD. VERSUS COMMISSIONER OF INCOME TAX, WEST BENGAL-V. 1995 (1) TMI 415 - SUPREME COURT . It was a case under the Income Tax Act. The Supreme Court has held that the word order in the expression order sought to be amended does not necessarily mean the original order and may mean the rectified order, therefore, second rectification within four years from the order of rectification was justified. - In the aforesaid case, there was no outer limit prescribed in the matter of limitation. In the present case, it has been provided under the statute that delay can be condoned only up to 30 days. In the considered opinion of this court, such application for rectification of the mistake was dismissed summarily there was no error apparent, hence, the doctrine of merger has not taken place. Therefore, the judgment relied upon does not help the petitioner in any manner. The cases relied upon by the learned counsel for the petitioner relate to those cases where the issue of doctrine of merger was involved and the cases relate to Income Tax Act or Central Excise Act, 1944. The provisions under both the Acts are not identical to the provisions dealing with limitation under the CGST Act, 2017. The provisions under the CGST Act, 2017 provides that the delay cannot be condoned beyond the period of 60 days. The Hon ble Supreme Court in the case of Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited and others 2017 (3) TMI 1628 - SUPREME COURT where it was held that the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be condoned taking recourse to Article 142 of the Constitution. Thus, the AAR was justified in rejecting the appeal on the ground of limitation as it was not having power to condone the delay beyond 30 days. Therefore, this Court also does not find reason to condone the delay keeping in view the statutory provisions - thus this court does not find any reason to interfere with the order passed by the AAR as the appeal itself was preferred beyond the expiry of limitation period. Petition dismissed.

Summary

Issues Involved:
1. Classification of royalty paid for Mining Lease under GST.
2. GST applicability on statutory contributions to DMF and NMET.
3. Appeal against the AAR's order and the doctrine of merger.
4. Limitation period for filing an appeal under the CGST Act.

Detailed Analysis:

1. Classification of Royalty Paid for Mining Lease under GST:
The petitioner sought a ruling on whether the royalty paid for a Mining Lease could be classified as "licensing services for the right to use minerals, including its exploration and evaluation" under heading 9973, attracting GST. The AAR ruled that the royalty is part of the consideration for licensing services for the right to use minerals and is taxable at the same rate as the supply of like goods involving the transfer of title in goods until 31.12.2018 and at 9% CGST and 9% SGST from 01.01.2019 onwards.

2. GST Applicability on Statutory Contributions to DMF and NMET:
The petitioner also sought clarity on whether statutory contributions to the District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) under the MMDR Act, 1957, amounted to "Supply" and were liable for GST under the reverse charge mechanism. The AAR ruled that these contributions are part of the consideration for licensing services for the right to use minerals and are included in the value of each supply of services. The liability to pay tax is on the recipient of such services on a reverse charge basis as per Notification No. 13.2017-Central Tax dated 28.06.2017.

3. Appeal Against the AAR's Order and the Doctrine of Merger:
The petitioner filed an application for rectification of the AAR's ruling, which was rejected. The petitioner then appealed to the AAAR, which dismissed the appeal as barred by limitation. The AAAR held that the original order remains on record and only the mistakes are corrected in the rectification order. The doctrine of merger does not apply in such cases, and the appeal should have been filed within 30 days from the date of communication of the original order.

4. Limitation Period for Filing an Appeal Under the CGST Act:
The petitioner argued that the limitation period should be counted from the date of the rectification order, invoking the doctrine of merger. However, the court held that the statute under the CGST Act provides a strict limitation period of 30 days, extendable by another 30 days, for filing an appeal. The court emphasized that the doctrine of merger does not apply in the present case as the rectification application was dismissed summarily. The court cited several judgments to support its stance that statutory provisions governing limitation must be strictly adhered to and cannot be extended by invoking Article 226 of the Constitution.

Conclusion:
The court dismissed the petition, upholding the AAAR's decision to reject the appeal on the grounds of limitation. The court reiterated the importance of adhering to statutory timelines and held that the delay in filing the appeal could not be condoned beyond the period prescribed by the CGST Act. The petition was dismissed with no orders as to costs.