The Gauhati High Court has recently allowed a taxpayer to pay the GST dues in 48 equal installments considering their financial conditions.
The petitioner firm, Veteran Facility Management Services Pvt Ltd approached the Court claiming that as because the precarious financial condition it would not be possible for them to pay the entire amount due plus the interest and penalty within 36 installments, which is the maximum limit for the Chief commissioner and therefore, seeks to invoke the discretionary power of the Court in allowing them to pay the dues in 48 installments.
As per the Circular dated 28.02.2015, the Commissioner of GST is empowered and has the discretion of granting sanction to pay arrear of the GST in installments up to maximum of 24 monthly installments and the Chief Commissioners are given the jurisdiction and authority to sanction the payment of the arrears in monthly installments greater than 24 upto a maximum of 36.
Justice AchintyaMallaBujor Barua held that “although there may be an inherent power of the Court under Article 226 of the Constitution of India to use a discretion but at the same time when it is statutorily provided by the departmental authorities that the maximum permissible installments be 36, we are of the view that the Court ought not to randomly extend such installments beyond 36 in the guise of exercising discretionary power but at the same time, we also take note that if further installments are not allowed to the petitioner firm, they would be unable to pay the tax due and it may result in a sustenance of the order of cancellation of their registration. If it is so, there would be an end of their business in the present form that they are undertaking and it would also be the end of the Department to have any tax from the petitioners in the form of the present business any further.”
Considering the matter in its entirety, the Court asked the authorities in the GST Department whether in the facts and circumstances of the present case, the permissible installments can be extended upto 48.
While concluding, the Court held that “Without taking any specific view on the aforesaid aspect and in order to provide some succor to the petitioner firm so that they can remain in the business they are presently undertaking, it is provided that the amount of Rs.2,58,30,801/- plus the interest and the penalty that may be applicable under the law be evaluated by the department and the assessed amount be determined. The said amount be equally divided by 48 and the monthly amount payable by the petitioner firm be determined and communicated to the petitioner. Upon such determination the petitioner firm shall pay the determined monthly installments within the 7th of every month.”
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