Facts of the Case

Petitioner No.1, M/S Jaybee Gas Agencies, and its managing partner Smt. Susan Bigili Panaveli, challenged a demand notice dated 26.10.2023 issued by the State Tax Officer (Arrears Recovery), Pathanamthitta, and the consequent bank attachment order dated 23.11.2023 issued to Union Bank of India, Ranni Branch, freezing the petitioner's account. The petitioner had also applied to the Assistant Commissioner (Appeals) for a certified copy of the appellate order to enable filing of a second appeal, and offered to pay 20% of the disputed tax to secure release of the attachment.

Issues Involved

  1. Whether the bank account attachment should be lifted pending regularisation of the tax liability.
  2. Whether the petitioner should be permitted to discharge the confirmed tax liability of Rs.4,53,710/- in instalments instead of a lump sum.

Petitioner's Arguments

  • The petitioner was willing to discharge the tax liability but lacked the means to pay the entire amount of Rs.4,53,710/- at once.
  • Sought permission to pay in instalments and release of the bank attachment on payment of the first instalment.
  • Also sought a certified copy of the appellate order to enable filing of a second appeal.

Respondent's Arguments

  • The Government Pleader did not seriously object to the petitioner's request for instalment payment.

Court Order / Findings

  • Considering the facts and the limited objection from the department, the Court directed the petitioner to discharge the entire tax liability in five equal monthly instalments, the first payable on or before 10.12.2023 and the remaining four on the 10th of each successive month.
  • On default of any instalment, the authority was left free to realise the balance amount in accordance with law.
  • On payment of the first instalment, the bank attachment was directed to be lifted, entitling the petitioner to operate its bank account.

Important Clarification

  • Where a taxpayer is willing to discharge a confirmed GST demand but is unable to pay it in one lump sum, courts have been willing to permit phased payment in reasonable instalments and to direct release of a coercive bank attachment upon payment of the first instalment, while preserving the department's right to proceed to recovery on default.

Sections Involved

  • Section 79, CGST/KGST Act 2017 — recovery of tax, including attachment of bank accounts.
  • Section 107, KGST Act 2017 — statutory appeal against demand/assessment orders.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee — an instalment facility was granted and the bank attachment was ordered lifted on payment of the first instalment, while the underlying tax liability itself was not disturbed.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.39932 of 2023
  • CNR: Not available
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 30-11-2023
  • Disposal Nature: Disposed of

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