2024 (7) TMI 670 - HC - GST

Challenge to impugned summary of the order creating a demand - arrears of tax on self-assessment under the provisions of the Central Excise Act, 1944 - period between February, 2015 and June, 2017 - HELD THAT - It appears that the petitioner is a Manufacturing Company, which has accumulated loss and was unable to discharge the tax liability under the old regime. The attempt of the petitioner to discharge part of the liability on the above dates stands recorded - Considering the fact that there is no other dispute barring the amount to be recovered from the petitioner, the discretion exercised partly in favour of the petitioner, by directing the petitioner to pay the balance amount in 12 equated monthly installments starting from 01.08.2024 ending with 01.07.2025. Petition disposed off.

Summary

Issues:
Challenge to summary order creating demand under existing laws, self-assessment under Central Excise Act, failure to pay admitted liability under Sabka Vishwas Scheme, due amount of tax, interest, and penalty, partial payment made by petitioner, discretion to pay balance amount in installments, consequences of failure to pay.

Analysis:

1. The petitioner challenged the summary order creating a demand under existing laws for arrears of tax on self-assessment under the Central Excise Act, 1944. The demand was based on self-assessment made by the petitioner under the Central Excise Rules, 2002. The petitioner had previously approached the designated authority under the Sabka Vishwas Scheme but failed to pay the admitted liability, resulting in a due amount of Rs. 1,46,79,069 towards tax, interest, and penalty.

2. The petitioner, a Manufacturing Company with accumulated losses, made partial payments totaling Rs. 25,00,000 against the demanded amount. This left a balance of Rs. 1,21,79,069 due and payable. The respondent invoked powers under Section 142(8) of the CGST Act, 2017, and Rule 142(A)(1) of the CGST Rules, 2017, to demand the outstanding amount.

3. The court, noting the absence of other disputes, decided to exercise discretion in favor of the petitioner. The petitioner was directed to pay the balance amount in 12 equated monthly installments starting from 01.08.2024 to 01.07.2025. This decision was made considering the petitioner's status as a Manufacturing Company facing difficulties in discharging tax liabilities.

4. In case of failure to comply with the payment schedule, the respondent was granted the liberty to proceed against the petitioner in accordance with the law. This could include attaching the petitioner's properties for sale and utilizing other legal measures to recover the outstanding amount.

5. The Writ Petition was disposed of with the above observations, and no costs were awarded. Connected Miscellaneous Petitions were also closed as a consequence of the judgment.