Delay in filing the appeal against Advance Ruling beyond prescribed limit can't be condoned

The Delhi Appellate Authority for Advance Ruling (AAAR) has ruled that delays in filing an appeal against an Advance Ruling beyond the statutory limit cannot be condoned. The case involved M/s Indian Institute of Corporate Affairs, who filed their appeal significantly late. The AAAR clarified that while a delay of up to 30 days beyond the initial 30-day period can be condoned for 'sufficient cause', the authority cannot entertain appeals filed beyond this extended limit.

The AAAR, Delhi, in the matter of M/s Indian Institute of Corporate Affairs [Advance Ruling (Appeal) Order No. 01/DAAAR/2022-23 dated May 05, 2022] has held that the delay in filing an appeal beyond the prescribed limit can't be condoned.

Facts:

M/s Indian Institute of Corporate Affairs, ("the Appellant") is a society registered under Section 12A/12AA of the Income Tax Act, 1961 ("the IT Act") and had an exemption under Section 10(23C) (iv) and (v) of the IT Act.

The Appellant has entered into Memorandum of Understanding ("MoU") with the Agriculture Insurance Company of India Limited ("AICL"), wherein, AICL in order to discharge its Corporate Social Responsibility ("CSR") for the financial year 2016-17, awarded a social welfare assignment on "Implementation of Integrated Village development program - improving infrastructure facilities in 50 villages in the states of Bihar, Jharkhand, Madhya Pradesh, Maharashtra and Uttar Pradesh".

This appeal has been filed by the Appellant challenging the ruling passed by the AAR, Delhi vide Advance Ruling No. 08/DAAR/2018dated June 28, 2020 holding that the amount received by the Appellant from the AICL is not in the nature of grant in aid and is covered in the definition of "consideration" for the supply of goods or services under Section 2(31) of the Central Goods and Services Tax Act, 2017 ("the CGST Act"). Further, the said supply of goods or services are not exempted from the payment of Goods or Services Tax ("GST") as per Notification No. 12/2017 - Central Tax (Rate) dated June 28, 2017 ("the Service Exemption Notification"). Hence the Appellant is liable to pay the GST under the agreement with the AICL.

Argument by the Appellant:

The Appellant contended that, the amount received as a grant, for executing specific charitable activities and the entire amount received was subject to actual utilization. Further, the Appellant had no right or possibility to generate any surplus out of the contract. The unspent balance (if any) is subject to a refund or directions of the donor and there was no reward or benefit offered other than the actual expenditures towards charitable purposes.

Issue:

• Whether the GST will be leviable on the stated transaction viz. grant, for executing specific charitable activities as per provisions of the CGST Act?
• If the answer to the above question is yes, whether the transaction can be exempted in whole or in parts as per the Service Exemption Notification?

Held:

The AAAR, Delhi, in Advance Ruling (Appeal) Order No. 01/DAAAR/2022-23 dated May 05, 2022, held as under:

• Analysed the provision of Section 100 of the CGST Act, "an appeal should be filed within 30 days from the date of communication of the advance ruling order that was sought to be challenged and the Appellate Authority is empowered to allow the appeal to be presented within a further period not exceeding 30 days if it is satisfied that the Appellant was prevented by sufficient cause from presenting the appeal within the initial period of 30 days".
• Noted that, in the Form ARA-02, the Appellant has stated that the date of communication of the advance ruling order was June 28, 2019 and the appeal against the same was filed on dated February 14, 2020. It clearly shows that the appeal has not been filed within the prescribed time period of thirty days from the date of communication of the order.
• Observed that, the appeal was hit by the limitation of time and the language of the Statute which confers power on the Appellate Authority to entertain the appeal by condoning the delay only up to 30 days after the expiry of 60 days.
• Held that, the Appellate Authority can't entertain this appeal beyond the extended period under the proviso would render the phrase "not exceeding thirty days" as the Appellate Authority is not a "Court" and hence the power to condone beyond the prescribed period does not arise.
• The appeal was dismissed on grounds of time limitation.