2020 (10) TMI 106 - HC - GST

Extension of time limit for making payment - permission to make payment in 6 monthly installments - applicant has not been able to adhere and honour the undertaking filed before this Court - HELD THAT - We were inclined to take a very strict view of the matter because once an undertaking on oath is filed before this Court, it is expected of the person giving such undertaking to comply with the same as the non-compliance would entail the consequences of contempt. We could have not only rejected this Civil Application but, in the process, even the interim relief would have stood vacated. However, with a view to give one opportunity to the writ-applicant, we extend the time period by a further period of six weeks to enable the applicant to comply with the undertaking and deposit the amount as directed in the order dated 19th February 2020. Application disposed off.

Summary

Issues:
1. Extension of time limit for payment of balance amount.
2. Interim relief regarding garnishee notices and interest on tax liability.
3. Compliance with the undertaking filed before the Court.

Extension of Time Limit for Payment:
In the main matter, the applicant sought an extension of time to pay the balance amount of ?44,77,778 in six monthly installments. The Court considered the larger issue of whether interest on belated tax payment under Section 50 of the CGST Act is automatic or should be determined after the assessee's explanation. The applicant proposed to deposit ?10,00,000 within a week and the balance in four equal installments. The Court granted interim relief based on this undertaking and scheduled a further hearing with another civil application.

Interim Relief and Compliance with Undertaking:
The applicant filed an undertaking to deposit the specified amounts within the given timeline. However, due to lockdown difficulties, the applicant failed to comply with the undertaking. The Court acknowledged the importance of honoring undertakings and the consequences of non-compliance. Despite this, the Court extended the time period by six weeks to allow the applicant to fulfill the undertaking. It was made clear that failure to pay within the extended period would result in the automatic vacation of the interim relief, allowing the respondents to proceed with the garnishee notices and related matters.

In conclusion, the Court disposed of the Civil Application, emphasizing the significance of adhering to undertakings filed before the Court and the consequences of non-compliance. The judgment highlighted the importance of timely payment of tax liabilities and the need for strict compliance with court orders to avoid contempt proceedings.