Malayalam Motors Pvt Ltd VS Assistant State Tax Officer

The petitioner, a private limited company operating in the automobile sales sector, has filed a writ petition claiming that although they submitted GSTR-1 returns from February to May 2020, the COVID-19 pandemic hindered their ability to accumulate sufficient funds to pay the entire tax amount owed. The company expresses its intention to settle the tax arrears without contest, but the respondent, presumably a tax authority, has declined to allow installment payments. The petitioner emphasizes the ongoing financial strain caused by the pandemic, asserting their incapacity to make a lump sum payment for the admitted tax liability during that period. They seek relief from the court to permit installment payments due to their current financial constraints.

pay the admitted tax for the period in question. The petitioner, a private limited company engaged in automobile sales, asserts that due to the COVID-19 pandemic, it faced financial constraints, making it challenging to settle the tax liability in a lump sum. Despite its willingness to clear the dues, the petitioner seeks permission from the court to pay the arrears in instalments, considering the ongoing economic challenges.

However, the respondent, represented by the learned Standing Counsel, argues that the existing provisions of the GST Act do not authorize the payment of admitted tax in instalments. Therefore, they oppose the petitioner’s request, citing statutory limitations.

After hearing both parties, the court deliberates on the matter. It acknowledges the petitioner’s acknowledgment of its tax liability and its genuine intention to fulfill it. The court also recognizes the unprecedented circumstances caused by the COVID-19 pandemic, which have adversely affected various industries, including automobile sales.

Considering the submissions and the statutory framework, the court concludes that the current provisions of the GST Act do not explicitly allow for the installment-based payment of admitted tax. Despite sympathizing with the petitioner’s situation, the court finds itself bound by the legal constraints imposed by the statute.

In light of this, the court is unable to grant the relief sought by the petitioner. However, the court encourages the petitioner to explore alternative avenues within the legal framework to address its financial difficulties, possibly through discussions with the tax authorities or other applicable provisions.

In summary, while acknowledging the petitioner’s plight and its willingness to fulfill its tax obligations, the court, constrained by the statutory provisions, cannot grant the requested relief for installment-based payment of admitted tax. The petitioner is advised to seek alternative solutions within the confines of the law to address its financial constraints.

The petitioner, a private limited company operating in the automobile sales sector, filed GSTR-1 returns from February 2020 to May 2020. However, due to the adverse financial impact of the Covid-19 pandemic, the company was unable to gather sufficient funds to make a lump sum payment of the admitted tax. Despite intending to pay the tax arrears without contest, the respondent authority declined to allow installment payments. The petitioner argues that the pandemic has severely hindered its ability to generate funds, thus seeking court direction to file returns without immediate full payment but with a commitment to pay the tax, interest, and late fees in installments.

The respondent, represented by the learned Standing Counsel, asserts that the existing provisions of the tax statute do not permit installment payments of the admitted amount shown in the return. Therefore, the relief sought by the petitioner cannot be granted under the law.

After hearing arguments from both parties, the court acknowledges that the petitioner does not contest its tax liability or the amount owed for the specified period. Rather, it seeks an installment facility due to the severe financial constraints brought about by the pandemic, which has essentially halted its business operations.

In a precedent case (W.P.(C) No.14275/2020), the court directed the tax authority to accept belated returns and allowed the petitioner to settle the tax liability through equal monthly installments, considering similar circumstances.

Given the petitioner’s non-disputed liability and its desire to resolve the matter swiftly, the court deems it appropriate to direct the respondent to accept the belated returns for February 2020 to April 2020 without demanding immediate payment of the admitted tax. Instead, the petitioner will be permitted to settle the tax liability, inclusive of interest and late fees, through equal successive installments.

The petitioner, a private limited company in the automobile sales sector, filed GSTR-1 returns from February 2020 to May 2020 but couldn’t pay the admitted tax due to financial constraints caused by the Covid-19 pandemic. The company intends to settle the tax arrears without dispute but seeks permission to pay in instalments. However, the respondent, representing tax authorities, denies this request citing statutory limitations.

After hearing arguments from both sides, the court notes that the petitioner acknowledges its tax liability and only seeks an instalment plan due to pandemic-induced financial hardships. Referring to a previous case with similar circumstances, where the court allowed belated returns and instalment payments, the court decides to grant relief to the petitioner.

The court orders the tax authority to accept belated returns without immediate tax payment, allowing the petitioner to settle the tax liability, including interest and late fees, in equal monthly instalments starting from November 15, 2020, to August 15, 2021. However, failure to pay any instalment will void this judgment, enabling the tax authority to pursue recovery proceedings as per the law.

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