2025 (6) TMI 351 - HC - GST

Seeking payment of the outstanding GST liability in instalments under Section 80 of CGST Act - HELD THAT - On an application filed by the assessee the Commissioner may for the reasons to be recorded in writing allow such payment in monthly instalments not exceeding twenty four however subject to payment of interest under Section 50. In the case in hand the outstanding amount due to be paid by the petitioner is Rs. 4, 74, 00, 293.26/- and it is the categorical contention of the petitioner that because of his financial liability he cannot make payment of the entire amount in one go. Thus taking note of the submissions of learned Advocates of both sides and also in view of the provision of Section 80 of the Act of 2017 this Court is inclined to dispose of this petition by directing the respondent authorities to dispose of the representation dated 26.05.2025 filed by the petitioner within a period of three weeks from the date of receipt of certified copy of this order by a reasoned order keeping in mind the provision of Section 80 of the Act of 2017 as well as the financial liability of the petitioner. The petitioner shall obtain a certified copy of this order and place the same before the respondent authorities within a week from today. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

(a) Whether the petitioner, an assessee under the Central Goods and Services Tax Act, 2017 (hereinafter "the Act of 2017"), is entitled to seek payment of the outstanding GST liability in instalments under Section 80 of the Act of 2017;

(b) Whether the respondent authorities are obligated to consider and dispose of the petitioner's representation requesting instalment payment of the GST dues;

(c) Whether the respondent authorities can initiate coercive action against the petitioner for non-payment of the outstanding GST amount pending disposal of the petitioner's representation;

(d) The scope and application of Section 80 of the Act of 2017 concerning extension of time and payment of tax in instalments, including the conditions and limitations attached thereto.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Entitlement to Payment of GST Liability in Instalments under Section 80 of the Act of 2017

Relevant legal framework and precedents: Section 80 of the Act of 2017 explicitly empowers the Commissioner to allow a taxable person to pay any amount due under the Act, other than the self-assessed liability in returns, in monthly instalments not exceeding twenty-four. This facility is subject to the payment of interest under Section 50 and conditions prescribed by law. The proviso to Section 80 stipulates that default in any instalment renders the entire outstanding balance immediately payable without further notice.

Court's interpretation and reasoning: The Court carefully examined the language of Section 80, noting that it is discretionary ("may") and contingent upon an application by the taxable person and reasons recorded in writing by the Commissioner. The Court acknowledged the petitioner's financial constraints and the substantial outstanding amount of Rs. 4,74,00,293.26/- which cannot be paid in a lump sum.

Key evidence and findings: The petitioner's representation dated 26.05.2025 requesting instalment payment was undisputed. The petitioner had already paid a partial sum of Rs. 1,05,31,034/- towards the total GST liability of Rs. 5,79,31,327.26/-. The petitioner's financial incapacity to pay the balance in one go was a material fact.

Application of law to facts: The Court found that the petitioner's application falls squarely within the ambit of Section 80, entitling him to seek instalment payment. The provision contemplates such relief, subject to the Commissioner's discretion and conditions.

Treatment of competing arguments: The respondents did not oppose the petitioner's entitlement to seek instalment payment or the direction to consider the representation. Their acquiescence facilitated the Court's direction.

Conclusions: The petitioner is entitled to have his representation considered for payment of the outstanding GST liability in instalments under Section 80 of the Act of 2017.

Issue (b): Obligation of Respondent Authorities to Consider and Dispose of the Representation

Relevant legal framework and precedents: Administrative law principles mandate that representations made by a party seeking exercise of statutory discretion must be considered and disposed of within a reasonable time with reasons recorded. Section 80 requires the Commissioner to record reasons in writing when granting instalment payment.

Court's interpretation and reasoning: The Court noted that the petitioner's representation dated 26.05.2025 had not been responded to by the authorities. The failure to dispose of the representation deprived the petitioner of the statutory remedy envisaged under Section 80.

Key evidence and findings: The undisputed fact was that the petitioner's representation remained pending without any response or order from the authorities.

Application of law to facts: The Court held that the authorities are duty-bound to dispose of the representation by recording reasons in writing, as mandated by Section 80. The Court directed disposal within three weeks from receipt of the certified copy of the order.

Treatment of competing arguments: The respondents expressed no objection to this direction, indicating acceptance of the obligation.

Conclusions: The respondent authorities must dispose of the petitioner's representation for instalment payment within a stipulated timeframe by a reasoned order.

Issue (c): Prohibition of Coercive Action Pending Disposal of Representation

Relevant legal framework and precedents: While the Act provides for recovery of dues and coercive measures in case of default, the principle of natural justice and statutory discretion under Section 80 require that coercive action should not be taken while an application for instalment payment is pending consideration.

Court's interpretation and reasoning: The Court recognized the petitioner's apprehension of coercive action and balanced it against the statutory scheme. It directed that no coercive action be initiated until the representation is disposed of.

Key evidence and findings: The petitioner's claim of threats and pressure for immediate payment was not disputed.

Application of law to facts: The Court's direction safeguards the petitioner's right to seek instalment payment without being subjected to immediate coercive recovery measures.

Treatment of competing arguments: The respondents did not oppose this interim protection.

Conclusions: Coercive action against the petitioner is restrained until the representation is disposed of.

Issue (d): Scope and Conditions of Section 80 of the Act of 2017

Relevant legal framework and precedents: Section 80 allows payment of tax and other amounts in instalments, except for self-assessed liabilities in returns. The Commissioner's discretion is subject to prescribed conditions, including payment of interest under Section 50 and the proviso regarding default consequences.

Court's interpretation and reasoning: The Court emphasized the conditional nature of the relief under Section 80, highlighting that the Commissioner must record reasons in writing and impose conditions as prescribed. The Court underscored the proviso that default in any instalment triggers immediate recovery of the entire outstanding amount.

Key evidence and findings: The petitioner's outstanding amount was not self-assessed but demanded by the authorities, making it eligible for instalment payment under Section 80.

Application of law to facts: The Court's direction to dispose of the representation necessarily involves consideration of these statutory conditions and the petitioner's financial situation.

Treatment of competing arguments: No contrary submissions were made regarding the scope of Section 80.

Conclusions: The relief under Section 80 is discretionary, conditional, and subject to strict compliance with prescribed conditions and consequences of default.

3. SIGNIFICANT HOLDINGS

The Court held:

"On an application filed by a taxable person, the Commissioner may, for reasons to be recorded in writing, extend the time for payment or allow payment of any amount due under this Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 50 and subject to such conditions and limitations as may be prescribed."

The Court established the principle that the statutory discretion under Section 80 must be exercised by the Commissioner by