Veteran Security Services VS Union Of India

Heard Mr. N Hawelia, learned counsel for the petitioner, and Mr. S C Keyal, learned Standing Counsel for all the respondents.

1. Parties Involved: The petitioner is M/S Veteran Security Services, a partnership firm engaged in providing security services. The petitioner is registered under the Goods and Services Act, 2017, with GSTIN No. 18AAGFV1352A2ZI.

2. Petitioner’s Business and GST Compliance: The petitioner is obligated to file monthly returns under GST using Form GSTR-1. The firm provided security services to AIRCEL outlets under a contract agreement.

3. Issue of Non-payment: AIRCEL went out of business, resulting in a substantial amount of unpaid dues to the petitioner. This financial strain led to the petitioner’s inability to pay the required GST dues on time.

4. Financial Default: Consequently, there is a default amounting to Rs. 2,58,30,801/- for the period of March.

The petitioner’s non-compliance with GST payment requirements is attributed to the financial loss incurred due to AIRCEL’s business closure and the subsequent non-receipt of payments owed under the contract.

From 2018 up to November 2020, the taxpayer did not pay the required tax amount under the CGST Act, 2017 Consequently, interest became applicable under Section 50(1) of the CGST Act, 2017 which mandates interest on delayed payment of tax Additionally, penalties under Section 125 of the CGST Act, 2017 were also applicable as this section deals with general penalty provisions for contraventions where no specific penalty is provided Due to the non-payment of the tax amount, an order for the cancellation of registration was issued on January 19, 2021, by the Superintendent, Guwahati-C-5, as per the relevant provisions of the CGST Act, 2017.

The petitioner failed to pay the required tax amount for the period from 2018 up to November 2020 along with the applicable interest payable under Section 50(1) and penalty under Section 125 of the CGST Act, 2017 resulting in the issuance of an order of cancellation of registration dated 19.01.2021 by the Superintendent, Guwahati-C-5 under the provisions of Section 29 of the CGST Act, 2017; the petitioner, being aggrieved by the order of cancellation, submitted an application for revocation of cancellation which was subsequently rejected by an order dated 18.05.2021 leading to the institution of this writ petition.

The petitioner firm faced an issue where they had not paid the required tax amount for the period from 2018 up to November 2020, which resulted in applicable interest payable under Section 50(1) and a penalty under Section 125 of the CGST Act, 2017. Due to this non-payment, an order of cancellation of registration was issued by the Superintendent, Guwahati-C-5 on 19.01.2021 as per the provisions of Section 29 of the CGST Act, 2017. The petitioner, aggrieved by this order, submitted an application for revocation of the cancellation. However, this application was rejected by an order dated 18.05.2021, leading the petitioner to file this writ petition. The petitioner firm has expressed their willingness to pay the defaulted tax amount along with the interest and penalty as assessed by the department. Due to their precarious financial condition, they are unable to make the payment in a single installment and therefore request permission to pay the necessary amounts in 48 installments.

The petitioner firm, having defaulted in tax payments from 2018 up to November 2020, accrued interest payable under Section 50(1) and a penalty under Section 125 of the CGST Act, 2017. Due to non-payment of the required tax amount, the Superintendent of Guwahati-C-5 issued an order of cancellation of registration on 19.01.2021 as per the provisions of Section 29 of the CGST Act, 2017. Aggrieved by this cancellation, the petitioner applied for revocation, which was also rejected by the order dated 18.05.2021. Consequently, the petitioner instituted this writ petition, expressing willingness to pay the defaulted tax amount plus the applicable interest and penalty. However, due to financial constraints, the petitioner requested permission to make the necessary payments in 48 installments, referring to Circular No. 996/3/2015-CX dated 28.02.2015 from the Under Secretary to the Government of India in the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs. Paragraph 5 of this Circular states that the Board has decided to allow recovery of arrears of taxes, interest, and penalties in installments, with the Commissioners having discretionary power to grant sanction for up to 24 monthly installments and the Chief Commissioners for more than 24 and up to a maximum of 36 monthly installments.

From 2018 up to November 2020, the petitioner firm failed to pay the applicable tax amount along with interest under Section 50(1) and penalty under Section 125 of the CGST Act, 2017, leading to an order for cancellation of their registration dated 19.01.2021 issued by the Superintendent, Guwahati-C-5 as per Section 29 of the CGST Act, 2017. Aggrieved by the cancellation, the petitioner submitted an application for revocation, which was subsequently rejected by an order dated 18.05.2021, leading to the institution of this writ petition. The petitioner expressed willingness to pay the defaulted tax amount, interest, and penalty but due to their precarious financial condition, requested to make the necessary payments in 48 installments, referencing Circular No. 996/3/2015-CX dated 28.02.2015 from the Ministry of Finance, which allows recovery of arrears in installments. Paragraph 5 of the Circular grants discretionary power to Commissioners to allow up to 24 monthly installments and to Chief Commissioners for more than 24 and up to 36 monthly installments. The application for installment payments must be made to the jurisdictional Commissioner with full justification, and the approval must be documented with a clear identification of the installment plan and stipulations for withdrawal of permission in case of default.

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