Facts of the Case

The petitioner, proprietor of Ampure Technologies, a dealer registered under the State Goods and Services Tax Act, 2017, executed water-supply works for Anganwadis and schools across panchayats in Malappuram district under a Kerala Water Authority project. A substantial portion of the contract amount remained unpaid, and a completion certificate was withheld citing the Covid-19 pandemic. As a result, the petitioner could not clear his tax liability and failed to file returns for February and March 2021. He was issued a notice under Section 46 of the CGST Act, 2017, with assessment under Section 62 proposed for non-filing. The petitioner approached the High Court seeking permission to pay the outstanding tax in 20 equated monthly instalments and to file subsequent returns without coercive action.

Issues Involved

  1. Whether the Commissioner has the power under Section 80 of the CGST Act, 2017 to permit payment of tax dues arising from self-assessed returns in instalments.

Petitioner's Arguments

  • Financial hardship caused by the Covid-19 pandemic, compounded by the Kerala Water Authority's failure to release payments, prevented timely payment of tax.
  • Instalment facility should be granted, as this Court had permitted similar relief in W.P.(C) No. 14275 of 2020 and W.P.(C) No. 21490 of 2020.

Respondent's Arguments

  • Under Section 80 of the CGST Act, the power to extend time or permit instalments does not extend to tax due under self-assessed returns, since the petitioner had himself self-assessed the liability.
  • The precedents relied upon by the petitioner were pending consideration in writ appeals and had not attained finality.

Court Order / Findings

  • The Court held that Section 80 of the CGST Act confers power to extend time for payment only for dues other than those arising from self-assessed returns; the Commissioner has no power to grant instalments for such self-assessed tax.
  • The Court declined to go into the correctness of the Supreme Court's ruling in Asstt. Commr. (CT), LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Ltd., since the petitioner had already enjoyed nearly 12 months' delay in payment.
  • The petitioner was directed to pay the tax due from February 2021 onward within one month; on receipt of the dues, the respondents were directed to accept payment and permit continuation of the petitioner's registration.

Important Clarification

  • The instalment facility under Section 80 of the CGST Act, 2017 is confined to tax dues other than those arising out of self-assessed returns (i.e., Form GSTR-3B liabilities); such self-assessed dues must be paid in full and cannot be spread over instalments.
  • Registration cancelled or threatened for non-filing/non-payment can still be preserved by courts on a direction to clear dues within a fixed, short timeframe, without extending instalment relief.

Sections Involved

  • Section 46, Central Goods and Services Tax Act, 2017 — notice to a registered person who fails to furnish returns.
  • Section 62, Central Goods and Services Tax Act, 2017 — best judgment assessment where returns are not filed despite notice.
  • Section 80, Central Goods and Services Tax Act, 2017 — power of the Commissioner to allow payment of tax in instalments, excluding self-assessed dues.

Decision – In Favour of

Disposed of with directions — largely in favour of the Department on the instalment question, since the statutory bar on instalments for self-assessed dues was upheld; the petitioner nonetheless obtained a limited concession of one month to pay in full and retain registration.

Related Case Laws

  • Asstt. Commr. (CT), LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Ltd., 2020 (36) G.S.T.L. 305 (S.C.) — on the limits of instalment facility for self-assessed tax.
  • M/S G & C Infra Innovations vs Union of India, WP(C) No. 14096 of 2019, Kerala High Court — same-day Kerala High Court GST relief order.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No. 16343 of 2021
  • Coram: Hon'ble Mr. Justice Bechu Kurian Thomas
  • Date of Order: 07.03.2022

Link to Download the Order

https://mytaxexpert.co.in/uploads/1787074369_4592compressed.pdf

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