2022 (5) TMI 238 - HC - GST

Seeking prayer for three-month moratorium of the payment to be made in terms of the order dated December 7, 2021 as modified on March 23, 2022 - petitioning assessee seeking order not to make the installment payments in the month of April, 2022 for which the assessee is already in default and for the months of May and June, 2022 - HELD THAT - In view of the apparent damage to the petitioning assessee s manufacturing facility, a moratorium for a period of two months is granted. That is to say that the payment that was due in April, 2022 will not be deemed to have been defaulted and the payment due in May, 2022 need not be paid by the 15th day of this month. The amount due in April, 2022 must be paid along with the amount due in June, 2022 and the amount due in May, 2022 must be paid along with the installment due in July, 2022. The prayer for spreading out the overdue amount over the rest of the installments is expressly declined. The amounts for the months of April and May, 2022 will have to be made good in the manner indicated. Upon the first default of the petitioning assessee in making the payment in terms of this order and without further reference to this Court or other authority, it will be open to the Department to take immediate appropriate steps in accordance with law and the petitioning assessee will be deemed to be in default of the entire amount then due. Petition disposed off.

Summary

Issues:
1. Modification of an order dated December 7, 2021, as subsequently altered by an order of March 23, 2022 in WP (C) No.344 of 2021.
2. Petitioner's request for a three-month moratorium on payment due to damage caused by a squall.
3. Assessment of the petitioner's conduct and credibility in seeking further indulgence from the Court.

Analysis:

1. The judgment pertains to a petition filed for the modification of an order dated December 7, 2021, subsequently altered on March 23, 2022. The petitioner, an assessee, was initially allowed to pay an outstanding amount in monthly installments. The order was modified to extend the payment deadline to April 5, 2022, as a one-time measure without affecting subsequent payments. The petitioner sought a further three-month moratorium due to damage caused by a squall in April 2022.

2. The petitioner's request for a moratorium on payments was based on a report estimating repair costs exceeding Rs.4 crore and a three-month repair timeline. The Court acknowledged the damage to the petitioner's manufacturing facility and granted a two-month moratorium. The Court directed the petitioner to pay the amount due in April 2022 along with the June installment and the May 2022 payment with the July installment. The Court rejected the petitioner's request to spread the overdue amount over remaining installments.

3. The Court expressed skepticism regarding the petitioner's conduct, noting a lack of confidence in the petitioner's credibility. Despite the petitioner's assurance of not seeking further indulgence, the Court observed a pattern of seeking periodic moratoriums, indicating a lack of reliability. The judgment emphasized that any future default by the petitioner would result in immediate consequences without further reference to the Court. The Court modified previous orders, indicating reluctance to grant additional leniency in the future.

In conclusion, the judgment addressed the petitioner's request for a moratorium on payments, balancing the need for relief due to unforeseen circumstances with concerns about the petitioner's credibility and past conduct. The Court's decision to grant a limited moratorium while cautioning against future defaults reflects a balanced approach to addressing the petitioner's circumstances while upholding financial obligations.