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2025 (5) TMI 1262 - HC - GSTDelayed filing of returns and delayed payment of taxes for the financial years 2018-2019 and subsequent periods - Liability to pay late fee and interest under Sections 47 and 50 of the Central Goods and Services Tax (CGST) Act 2017 - HELD THAT - Evidently the earlier application of the petitioner firm to deposit the demanded amount in forty-eight equal monthly installments is not as per the statutory prescriptions contained in Section 80 of the CGST Act. In such obtaining fact situation this Court is of the considered view that the petitioner firm can be provided another opportunity to submit a fresh application renewing its request to pay the demanded amount in twenty-four equal monthly installments as permissible under Section 80 of the CGST Act. Accordingly leave is granted to the petitioner firm to file a fresh application for allowing it to deposit the demanded amount in twenty-four equal monthly installments in terms of Section 80 of the CGST Act within a period of 3 three weeks from today. In the application the petitioners could raise the ground s regarding untenability relating to liability self-assessed. It is observed that in the event such an application is filed by the petitioner firm the Commissioner the respondent no. 2 shall consider such application in terms of Section 80 of the CGST Act read with Rule 158 of the CGST Rules 2017 and afford a personal hearing and thereafter issue an order on merits. It is further observed that the order shall be passed as expeditiously as possible preferably an outer limit of 1 one month from the date of submission of such application. Petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Liability for Late Fee and Interest under Sections 47 and 50 of the CGST Act, 2017 Legal Framework and Precedents: Sections 47 and 50 of the CGST Act impose a late fee for delayed filing of returns and interest for delayed payment of tax, respectively. Section 16(4) restricts the availment of input tax credit (ITC) if returns are filed beyond prescribed deadlines. Section 74 deals with tax recovery and proceedings for non-payment or short payment of tax. Court's Interpretation and Reasoning: The Court noted that the petitioner firm filed returns beyond due dates and did not pay applicable interest timely. The notices issued by the respondents quantified the late fee and interest based on scrutiny of returns and payments made. The petitioner firm did not dispute the calculation of interest under Section 50(1), only seeking installment payments. The Court found the notices and demand consistent with the statutory provisions and the petitioner's own admissions. Key Evidence and Findings: The records showed delayed filing of GSTR-3B returns and delayed payment of taxes with quantified amounts of late fee and interest. The petitioner firm's own correspondence acknowledged liability to the extent of Rs. 36,36,106/- and willingness to pay late fee and interest. Application of Law to Facts: The Court applied Sections 47 and 50 to the facts of delayed filing and payment, confirming the statutory liability of the petitioner firm. Treatment of Competing Arguments: The petitioner's argument that the liability was self-assessed and hence not subject to interest was considered separately under Issue 4. Conclusion: The petitioner firm is liable to pay late fee and interest as demanded under Sections 47 and 50 of the CGST Act. Issue 2: Entitlement to Pay Demanded Amount in Forty-Eight Monthly Installments Legal Framework and Precedents: Section 80 of the CGST Act allows the Commissioner to extend time or allow payment of any amount due (other than self-assessed liability) in monthly installments not exceeding twenty-four, subject to interest payment and conditions prescribed. Rule 158 of the CGST Rules provides procedural guidelines for such installment applications. Court's Interpretation and Reasoning: The Court emphasized that the statutory limit for installment payments is twenty-four months. The petitioner's request for forty-eight installments exceeded this limit and was rightly rejected by the competent authority. The Court held that neither the authorities nor the Court can act contrary to statutory prescriptions. It rejected the petitioner's plea for a mandamus directing acceptance of forty-eight installments as impermissible. Key Evidence and Findings: The petitioner's representation dated 06.02.2024 requesting forty-eight installments was denied by the respondent's letter dated 22.10.2024 citing Section 80. The petitioner did not respond to subsequent communications clarifying payment amounts. Application of Law to Facts: The Court applied the statutory cap of twenty-four installments strictly, finding the denial lawful and consistent with the CGST Act and Rules. Treatment of Competing Arguments: The petitioner argued hardship due to business impact; however, the Court noted that statutory mandates cannot be overridden by hardship claims. The Court allowed the petitioner to file a fresh application for twenty-four installments. Conclusion: The petitioner is not entitled to pay in forty-eight installments; the statutory maximum is twenty-four. The denial of the request was lawful. Issue 3: Discretion of Commissioner under Section 80 and Role of the Court Legal Framework and Precedents: Section 80 confers discretion on the Commissioner to allow installment payments subject to conditions. The Court cannot direct authorities to act contrary to statutory provisions. Court's Interpretation and Reasoning: The Court reiterated that the discretion of the Commissioner is circumscribed by the statute. The Court cannot compel the authority to allow more installments than permitted by law. It observed that no mandamus lies to enforce action in violation of statutory provisions. Key Evidence and Findings: The petitioner sought judicial intervention to allow forty-eight installments, which the Court found untenable. Application of Law to Facts: The Court upheld the statutory framework limiting installment payments and the Commissioner's rejection of the petitioner's request beyond that limit. Treatment of Competing Arguments: The petitioner's plea for judicial direction was rejected on principle. Conclusion: The Commissioner's discretion is limited by statute; the Court cannot override statutory limitations. Issue 4: Tenability of the Ground that Demanded Amount was Self-Assessed and Not Eligible for Installments Legal Framework and Precedents: Section 80 excludes amounts due as per liability self-assessed in returns from installment facility. The petitioner contended that the demanded interest liability was self-assessed and hence not eligible for installment payment. Court's Interpretation and Reasoning: The Court noted the petitioner's willingness to pay in twenty-four installments and allowed a fresh application on this ground. The Court directed the Commissioner to consider the application including the petitioner's contention regarding self-assessed liability, affording personal hearing and deciding on merits within one month. Key Evidence and Findings: The petitioner's submissions and the respondent's willingness to consider a fresh application were noted. Application of Law to Facts: The Court recognized the petitioner's right to raise this ground in a fresh application and directed due consideration by the Commissioner. Treatment of Competing Arguments: The respondent agreed to consider the fresh application and examine the self-assessment issue in accordance with law. Conclusion: The petitioner may file a fresh application for installment payment raising the self-assessment ground; the Commissioner shall consider it expeditiously and on merits. Issue 5: Procedural Compliance and Application of Rule 158 of the CGST Rules, 2017 Legal Framework and Precedents: Rule 158 prescribes procedure for seeking payment extension or installment facility, including requirement of application in FORM GST DRC-20, report from jurisdictional officer, and issuance of order in FORM GST DRC-21. It also specifies conditions where installment facility is not allowed. Court's Interpretation and Reasoning: The Court found the petitioner's earlier application for forty-eight installments was not in conformity with Section 80 and Rule 158. The Court granted leave to file a fresh application in accordance with the statutory provisions, emphasizing procedural compliance and consideration of financial ability. Key Evidence and Findings: The petitioner's failure to respond to clarifications and the respondent's detailed communication on payments made were noted. Application of Law to Facts: The Court underscored the need for strict adherence to procedural requirements in installment applications. Treatment of Competing Arguments: The petitioner's plea for leniency was balanced with the statutory framework. Conclusion: The petitioner may file a fresh application complying with Rule 158 and Section 80; the Commissioner shall consider it with due process. 3. SIGNIFICANT HOLDINGS "Permissibility to allow the demanded amount in twenty-four installments in maximum is a statutory prescription, as contained in Section 80 of the CGST Act, 2017. Neither the respondent authorities can act contrary to such statutory prescription nor the Court can direct the respondent authorities to act contrary to such statutory prescription. No mandamus would lie for issuing a direction to the State respondents to act contrary to the statutory prescription contained in Section 80 of the CGST Act, 2017." "It is settled that no Court can issue mandamus directing the authorities to act in contravention of any statutory prescription as the same would amount to compelling the authorities to violate the statute." "The petitioner firm can be provided another opportunity to submit a fresh application renewing its request to pay the demanded amount in twenty-four equal monthly installments, as permissible under Section 80 of the CGST Act." "In the event such an application is filed by the petitioner firm, the Commissioner shall consider such application in terms of Section 80 of the CGST Act read with Rule 158 of the CGST Rules, 2017 and afford a personal hearing and thereafter, issue an order on merits." Core principles established include the inviolability of statutory limits on installment payments under Section 80, the non-interference by courts in statutory discretion exercised within legal limits, and the procedural mandate to consider fresh applications for installment payments in accordance with law and rules. Final determinations:
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