Facts of the Case

The petitioner, Md. Samsuddin Ahmed, proprietor of M/s S. Ahmed and Co., challenged the recovery proceedings initiated by the GST authorities before the Gauhati High Court. Following an assessment, the authorities determined that the petitioner was liable to pay an additional GST demand of ₹27,98,414. The petitioner did not dispute the tax liability but sought permission to discharge the outstanding amount through instalments due to financial constraints. It was also brought to the Court's notice that the petitioner had already deposited ₹5,56,782 towards the outstanding demand.

Issues Involved

  1. Whether an assessee who accepts the GST demand can seek payment of the outstanding liability through instalments under the GST law.
  2. Whether the High Court should grant interim protection against coercive recovery until the competent authority considers such a request.
  3. Whether the proper authority is required to examine an application for instalment payment in accordance with Section 80 of the CGST Act.

Petitioner’s Arguments

  • The petitioner did not dispute the additional GST liability determined by the department.
  • The only request was for permission to pay the outstanding demand through instalments.
  • It was submitted that substantial payment had already commenced and ₹5,56,782 had been deposited.
  • The petitioner requested the Court to permit filing of an appropriate application before the competent authority for consideration under the statutory provisions.

Respondent’s Arguments

  • The GST authorities submitted that Section 80 of the CGST Act specifically provides a mechanism for payment of tax dues by way of instalments.
  • It was argued that the Principal Commissioner, being the designated authority, was competent to consider such an application.
  • The respondents assured the Court that if an application was submitted by the petitioner, it would be examined and decided strictly in accordance with law.

Court Order / Findings

The Gauhati High Court observed that since both parties agreed that Section 80 of the CGST Act provides a statutory remedy, no further adjudication was required in the writ petition.

Accordingly, the Court:

  • Granted two weeks to the petitioner to submit a fresh application before the competent authority seeking permission to pay the GST dues through instalments.
  • Directed the competent authority to decide the application within four weeks from its receipt.
  • Ordered that no coercive action should be taken against the petitioner until the application is considered and an appropriate order is passed.
  • Disposed of the writ petition with the above directions.

Important Clarification

  • Section 80 of the CGST Act enables eligible taxpayers to seek permission for payment of GST dues through instalments.
  • Acceptance of the tax demand does not prevent a taxpayer from requesting instalment-based payment under the statutory provisions.
  • The competent authority must independently consider such applications in accordance with law.
  • Courts may grant temporary protection from coercive recovery where a statutory application is pending consideration, depending upon the facts of the case.

Section Involved

  • Section 80 of the Central Goods and Services Tax Act, 2017 – Payment of tax and other amounts in instalments.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785391536_2309compressed.pdf

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