Commissioner Can't Allow Deposit Of Interest Payment In Instalments: Orissa High Court

The petitioner/assesee contended that, in accordance with Section 39 read with Section 59 of the OGST Act, self-assessment returns on Form GSTR-3B and GSTR-1 were filed for the fiscal year 2019–20. While reviewing self-assessed returns for each tax period, the CT & GST Officer noted that the petitioner had filed the returns late.

The petitioner stated that non-payment of accepted tax is owing to the failure of IDCOL, a government entity, to disburse a large sum owed. The petitioner stated that the whole tax component has been deposited, although late.

The petitioner submitted that the petitioner was not in a position to discharge the demand for interest as raised by the CT & GST Organisation on account of the belated deposit of admitted tax. Therefore, the petitioner prayed before the Commissioner of CT & GST, Odisha, to allow it to discharge interest demand to the tune of Rs.68,15,506 by instalments.

The Commissioner of CT & GST rejected the prayer to allow the petitioner to discharge the liability towards the huge burden of interest.

The petitioner contended that the Commissioner of CT & GST, being vested with the power under Section 80 of the OGST Act, ought not to have rejected the application. The rejection of the prayer for deposit of interest demand in instalments by the Commissioner of CT & GST was the outcome of not only an arbitrary exercise of power but a misreading of the provision of the statute.

The department contended that the well-reasoned order of the Commissioner of CT & GST needs no indulgence. There was no scope or occasion to allow thirty-six instalments as sought by the petitioner. Doing so would be contrary to the statutory mandate.

The issue raised was whether the Commissioner of CT & GST was justified in rejecting the prayer of the petitioner to deposit the interest levied on account of the belated deposit of admitted tax as per self-assessed returns.

The court held that since interest is a part of tax and such tax being belated payment in respect of self-assessment, Section 80 of the OGST Act clearly excludes grant of instalment.

The court observed that the Commissioner is not conferred with the power to allow such an instalment in respect of the amount due as per the self-assessment return furnished. Section 80 empowers the Commissioner to grant permission only to the taxable person to make payment of any amount due on an instalment basis on an application filed electronically on Form GST DRC-20 as prescribed under Rule 158. The Commissioner, after considering the request by the taxable person on Form GST DRC-20 and the report of the jurisdictional officer, may issue an order on Form GST DRC-21. The commissioner may allow the taxable person to either extend the time or allow payment of any amount due under the Act on an instalment basis. Section 80 applies to amounts due other than the self-assessed liability shown in any return. The instalment period shall not exceed 24 months.

"The taxable person shall also be liable to pay prescribed interest on the amount due from the first day such tax was due to be payable till the date tax is paid. In view of the proviso to Section 80, if default occurs in payment of any one instalment, the taxable person would be required to pay the whole outstanding balance payable on such date of default itself without further notice. There was, therefore, no scope for the Commissioner of CT & GST to entertain an application for grant of instalment," the court added.

Case Title: M/s. P.K. Ores Pvt. Ltd. @ M/S. PK Minings Pvt. Ltd. Versus Commissioner of Sales Tax

Citation : 2022 LiveLaw (Ori) 102

Case No: W.P.(C) No. 10335 of 2022

Dated: 06.05.2022

Counsel For Appellant: Advocate Kananbala Roy Choudhury

Counsel For Respondent: Advocate Sidharth Shankar Padhy

Click Here To Read/Download Order