Facts of the Case

The petitioner, Tvl.AMK Athencottasan Muthamizh Kazhagam Man Power Services, represented by its Director R.Arul Jothi, is a manpower service provider engaged with Central Government departments and Tamil Nadu Government corporations, holding GSTIN 33ABBFA8472G1ZK. The petitioner had belatedly paid GST for the financial years 2019-20 and 2020-21. Consequently, the State Tax Officer, Nagercoil, and the Deputy Commissioner (ST) imposed interest under Section 50(1) and raised a demand under Section 73(3) of the GST Act vide references dated 09.02.2022 and 14.02.2022. The petitioner challenged these demands in two connected writ petitions, WP(MD) Nos.5963 and 5964 of 2023, along with connected miscellaneous petitions, before the Madurai Bench of the Madras High Court, and had earlier moved applications dated 24.11.2022, 09.01.2023 and 17.02.2023 seeking relief under Section 80 of the GST Act.

Issues Involved

  1. Whether the petitioner, having belatedly remitted GST partly during the Covid-19 period, was entitled to relief in the form of instalment payment of interest under Section 80 of the GST Act.
  2. Whether the writ court could grant such relief directly or whether the petitioner had to apply afresh to the Commissioner.
  3. Whether the demand notices under Section 73(3) and the interest levied under Section 50(1) could be sustained pending consideration of the Section 80 application.

Petitioner's Arguments

  • The petitioner was not pressing the primary relief challenging the demand notices, but instead sought the benefit of Section 80 of the GST Act.
  • Due to the Covid-19 pandemic, the petitioner belatedly paid GST, and the Commissioner has the power under Section 80 to grant up to 24 monthly instalments for payment of the interest imposed under Section 50(1).
  • The demand for interest ought to be moderated by allowing phased payment given the pandemic-related hardship.

Respondent's Arguments

  • Apart from the Covid-19 period, the petitioner had also filed GST returns belatedly for the period 2019-20, which was not attributable to the pandemic.
  • Invoking Section 80 requires the petitioner to file a formal application before the Commissioner, and any such application, if filed, would be considered strictly on its merits.

Court Order/Findings

  • The Court noted that Section 80 of the GST Act permits the Commissioner, on application and for reasons recorded in writing, to allow payment of amounts due (other than self-assessed liability) in up to 24 monthly instalments, subject to interest under Section 50 and prescribed conditions, with default in any instalment making the whole balance immediately recoverable.
  • Given the limited scope of the relief actually pressed, the Court suo motu impleaded the Commissioner, Commercial Taxes, as a party respondent.
  • The writ petitions were disposed of with a direction to the petitioner to submit a formal application to the newly impleaded Commissioner seeking instalments under Section 80.
  • The Commissioner was directed to pass appropriate orders on receipt of such application, on merits and in accordance with law.
  • It was made explicit that the Court expressed no opinion on the merits of the underlying claim.

Important Clarification

Section 80 relief (instalment payment of GST dues, other than self-assessed liability) is not self-executing through a writ petition; it requires a specific application to the Commissioner, who alone is empowered to record reasons and grant up to 24 monthly instalments. A writ court, when a petitioner confines relief to Section 80, will typically direct the petitioner to the Commissioner rather than adjudicate entitlement itself.

Sections Involved

  • Section 50(1), GST Act, 2017 — interest on delayed payment of tax.
  • Section 73(3), GST Act, 2017 — determination and demand of tax not paid or short paid, for reasons other than fraud.
  • Section 80, GST Act, 2017 — power of the Commissioner to allow payment of tax dues in instalments (up to 24 months), other than self-assessed liability shown in a return.

Decision – In Favour of

This is a disposal with directions rather than a merits determination. It is, in part, favourable to the Assessee, since the petitioner secured a direction enabling consideration of instalment relief under Section 80, but the Court expressly declined to rule on the validity of the underlying interest and demand, leaving that to the Commissioner's discretion.

Related Case Laws

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

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case No.: WP(MD) Nos.5963 & 5964 of 2023
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice B. Pugalendhi
  • Decision Date: 17-11-2023
  • Disposal Nature: Disposed of with directions

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