2020 (7) TMI 737 - HC - GST

Recovery of arrears of GST due - assessment year 2018-2019 (November 2018 to March 2019) - HELD THAT - The petitioner, who is an assessee under the GST Act, is not disputing his liability to tax, or the quantum thereof, for the period in question. It only seeks an instalment facility to pay the admitted tax, together with interest thereon, in view of the financial difficulties faced by it during the Covid pandemic situation, when its business has come to a total standstill. During the pendency of this Writ Petition, the petitioner has established its bonafides by effecting a payment of ₹ 4 lakhs towards the tax liability for the period 2018-2019. It is also relevant to note that, as of today, there is no demand against the petitioner for the unpaid tax amount. Under the circumstances, since the petitioner is not disputing his liability, and wishes to put a quietus to the matter, it is deemed appropriate to direct the respondent to accept the belated return filed by the petitioner for the period November 2018 to March 2019, without insisting on payment of the admitted tax declared therein - The respondents shall adjust the amount of ₹ 4 Lakhs paid by the petitioner during the pendency of this writ petition, towards the admitted tax liability, and thereafter permit him to discharge the balance tax liability, inclusive of any interest and late fee thereon, in equal successive monthly instalments commencing from 25th August 2020 and culminating on 25th March, 2021. Petition disposed off.

Summary

Issues:
Petitioner seeking permission to pay arrears of tax in instalments due to financial difficulties during the Covid pandemic.

Analysis:
The petitioner, a private limited company registered under the Goods and Service Tax Act, sought permission to pay arrears of tax for the assessment year 2018-2019 in instalments due to financial constraints caused by the Covid pandemic. The respondents initially refused the request, citing the lack of provisions in the Act for such instalment payments. However, the court considered the petitioner's situation, noting that the petitioner did not dispute the tax liability and had already made a payment of &8377; 4 lakhs towards the tax liability for the period in question. The court acknowledged the financial hardship faced by the petitioner and, in light of the petitioner's willingness to resolve the matter, directed the respondent to accept the belated return without insisting on immediate payment of the admitted tax. The court ordered the adjustment of the &8377; 4 lakhs paid by the petitioner towards the tax liability and allowed the petitioner to pay the remaining balance, including interest and late fees, in equal monthly instalments starting from August 25, 2020, to March 25, 2021. It was emphasized that failure to make a single instalment payment would result in the loss of the benefit granted by the judgment, allowing the respondent to initiate recovery proceedings for the outstanding amounts.

This judgment highlights the court's consideration of the petitioner's financial difficulties during the pandemic and the willingness of the petitioner to fulfill its tax obligations in a structured manner. The court balanced the interests of both parties by allowing the petitioner to pay the arrears in instalments while ensuring that the tax liability, interest, and late fees are eventually settled. The judgment serves as a practical solution to address the challenges faced by taxpayers in meeting their financial obligations during unprecedented circumstances, emphasizing the importance of cooperation and timely payment of taxes to maintain compliance with the law.