Ms Jitu Enterprises And Sounds Service vs. The Union Of INDIA
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The petitioner, MS JITU ENTERPRISES AND SOUNDS SERVICE, a partnership firm registered under the CGST Act, 2017, challenged two notices issued by the Deputy Commissioner, Central Goods and Services Tax. The first notice, dated 26.10.2023, from respondent no. 5, identified discrepancies in returns for the tax period 2018-2019, including late filing leading to a late fee of Rs. 1,13,850/- and interest of Rs. 38,55,335/-. The second notice, dated 29.11.2023, from respondent no. 4, in Form GST DRC 01A, referred to an investigation and stated that input tax credit availed after due dates for GSTR-3B returns (June 2018 to March 2021) was ineligible under Section 16(4) of the CGST Act, amounting to Rs. 8,79,904/-. It also highlighted non-payment of applicable interest under Section 50(1) for delayed tax payments from April 2018 to March 2022, quantifying it at Rs. 1,24,06,286/- (after adjusting Rs. 28,00,000/- deposited). The petitioner sought to pay this amount in 48 monthly installments, which was rejected by the competent authority on 22.10.2024, citing Section 80 of the CGST Act.
Held
The Court held that the rejection of the petitioner's prayer to deposit the demanded amount in forty-eight equal monthly installments was not inconsistent with Section 80 of the CGST Act. The Court reasoned that Section 80 of the CGST Act, read with Rule 158 of the CGST Rules, 2017, prescribes a maximum of twenty-four installments. Therefore, neither the respondent authorities nor the Court could direct actions contrary to this statutory prescription. The Court found the petitioner's submission that the Court could issue a direction for 48 installments to be untenable, as it would compel the authorities to violate the statute. However, acknowledging the petitioner's willingness to pay in twenty-four installments and their contention regarding self-assessed liability, the Court granted the petitioner an opportunity to file a fresh application for payment in twenty-four equal monthly installments within three weeks. The Commissioner was directed to consider this fresh application in terms of Section 80 of the CGST Act and Rule 158 of the CGST Rules, afford a personal hearing, and pass an order on merits expeditiously, preferably within one month of the application's submission. The issue regarding the untenability of self-assessed liability was permitted to be raised in the fresh application.
Key Issues
1. Whether the rejection of the petitioner's prayer to deposit the demanded amount in forty-eight equal monthly installments is inconsistent with Section 80 of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the Court could direct the respondent authorities to accept the demanded amount in forty-eight installments, despite the Commissioner's refusal. They also contended that the ground for rejection, stating the demanded amount was self-assessed liability, was not tenable. Furthermore, they expressed willingness to deposit the demanded amount in twenty-four equal monthly installments, which they believed would fall within the scope of Section 80. Revenue's contention: The revenue submitted that if a fresh application for installments is filed, it would be considered under Section 80 of the CGST Act within a reasonable period. They also stated that any grounds regarding the untenability of self-assessed liability would be duly examined in accordance with the law.
Sections Cited
Section 16, Section 47, Section 50, Section 74, Section 79, Section 80, Rule 142, Rule 158
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT
2025
Heard Mr. R.S. Mishra, learned counsel for the petitioners; Mr. B. Chakraborty, learned Central Government Counsel [CGC] for the respondent no. 1; and Mr. K. Jain, learned counsel representing Mr. S.C. Keyal, learned Standing Counsel, CGST for the respondent nos. 2 – 5. 2. The petitioners have approached this Court by the present writ petition instituted under Article 226 of the Constitution of India to assail a Notice bearing no. GEXCOM/AE/INV/507/2024-AE-O/o COM MR-CGST-DIBRUGARH dated 22.10.2024; and a Notice bearing no. GEXCOM/AE/INV/2910/2024/471 dated 28.11.2024; both issued by the respondent no. 3. 3. The petitioner no. 1 is a partnership firm having its registered office at Rangpur Nagar,
Page No.# 3/9 District – Sivasagar and the petitioner no. 2 is the managing partner of the petitioner no. 1 firm. The petitioner no. 1 firm [‘the petitioner firm’, for short] is engaged in the business of execution of contracts of house keeping services, etc. and it is registered under the provisions of the Central Goods and Services Tax [CGST] Act, 2017 on and from 01.07.2017. The petitioner firm was issued a GST Registration Certificate bearing Registration no. 18AAIFJ1040K1ZF on 26.09.2017. 4. As the petitioner firm is liable to pay tax under the CGST Act, 2017, the respondent no. 5 after scrutiny of the returns for the tax period : 2018 – 2019 submitted by the petitioner firm, issued a notice on 26.10.2023 in Form GST ASMT-10 finding certain discrepancies. In the notice, it was informed that on scrutiny of returns, it was found that the returns had been filed by the petitioner firm beyond the due dates and as a result, the petitioner firm was found liable to pay late fee under Section 47 of the CGST Act, 2017 and also interest on late payment of the taxes under Section 50 of the CGST Act, 2017 during the tax period : 2018 – 2019. The late fee amount was quantified at Rs. 1,13,850/- and the amount towards interest on delayed payment was quantified at Rs. 38,55,335/-. By the said notice, the petitioner firm was directed to explain the reasons for the discrepancies so found, by 27.11.2023. It was further informed to the petitioner firm that in the event no explanation was received by 27.11.2023, it would be presumed that the petitioner firm had nothing to say in the matter and proceedings in accordance with law would be initiated against it without making any further reference.
Thereafter on 29.11.2023, the respondent no. 4 issued a notice to the petitioner firm in Form GST DRC 01A under Rule 142[1A] of the CGST Act 2017 as intimation of tax ascertained as being payable under Section 74[5]. It had referred to a proceedings drawn vide Reference no. 35/Offence/GST/HQAE/DIB/2021-22 dated 25.01.2022. In the said notice, it was informed to the petitioner firm that investigation revealed from the GSTR-3B returns for the period from June, 2018 to March, 2021 that the returns were filed after the due dates for availing input tax credit [ITC] and according to the authorities, the same were ineligible in terms of Section 16[4] of the CGST Act. The amount was quantified at Rs. 8,79,904/-. In addition, the notice stated that it was revealed from the records that during the tax period
Page No.# 4/9 from April, 2018 to March, 2022, the petitioner firm had failed to pay the tax to the exchequer within the period prescribed. The petitioner firm though filed the GST returns in GSTR-3B after due dates but it did not pay the applicable interest under Section 50[1] of the CGST Act. In the notice, the amount calculated towards interest under Section 50[1] of the CGST Act for the delayed payment of the taxes was quantified at Rs. 1,24,06,286/-. It was further informed that it was revealed from the records that an amount of Rs. 28,00,000/- during the Financial Year : 2018-2019 was deposited through Form GST DRC-3 and hence, the amount of interest for the period from April, 2018 to March, 2022 would be Rs. 96,06,286/-. By the notice, the petitioner firm was requested to pay the amount of tax, Rs. 8,79,904/- along with Rs. 96,06,286/- towards delayed payment of taxes under Section 50[1] of the CGST Act. It was further informed that the compliance should be submitted by 01.12.2023 failing which show cause notice would be issued under Section 74 of the CGST Act.
The petitioner firm replied to the respondent no. 5 on 12.12.2023 in response to his notice dated 26.10.2023. Subsequently, another reply was submitted before the respondent no. 5 on 27.12.2023 by the petitioner firm.
Thereafter, the respondent no. 5 had issued a notice to the petitioner firm on 19.01.2024 intimating the outstanding liabilities found against the petitioner firm during scrutiny for the Financial Year : 2018-2019. It was informed that according to the petitioner firm’s calculation, the total delayed payment of interest for the financial year : 2018-2019 would come to Rs. 36,55,335/- as demanded. It was conveyed that the remaining amount of interest would be paid in installment and the petitioner firm was ready and willing to pay the amount towards late fee. The petitioner firm informed vide a letter dated 19.01.2024, in response to its letter dated 27.12.2023, that the petitioner firm’s claim regarding its liability to the extent of Rs. 36,36,106/- was found correct. The petitioner firm was also informed that about the liabilities it had to pay.
The petitioner firm after receipt of the notice in Form GST DRC 01A issued by the respondent no. 4, submitted a representation before the respondent no. 2 on 06.02.2024
Page No.# 5/9 with a prayer to allow the petitioner firm to deposit the amount intimated vide Form GST DRC-01A dated 29.11.2023 through forty-eight equal monthly installments. The representation dated 06.02.2024 of the petitioner firm was responded by a letter dated 22.10.2024. In the said letter, the petitioner firm was informed that its request to deposit the amount claimed vide Form GST DRC-01A in forty-eight equal monthly installments was not approved by the competent authority. It was mentioned that as the interest liability of Rs. 1,24,06,286/- was issued as per the liability self-assessed in the returns from April, 2018 to March, 2022, such amount was not eligible for payment in monthly installments in terms of Section 80 of the CGST Act. The petitioner firm was intimated that after verification of the payment particulars, it was noticed that the petitioner firm had paid only an amount of Rs. 19,00,000/- though it was earlier informed as Rs. 28,00,000/-. With such observations, the petitioner firm was informed that it would liable to pay an amount of Rs. 1,05,06,286/- under Section 50 of the CGST Act and such amount was demanded within a period of seven days from receipt of the letter dated 22.10.2024. It was further informed that non-deposit of the due interest might lead to initiation of appropriate action under Section 79 of the CGST Act and the rules framed thereunder.
In response to the above notices from the respondent authorities, the petitioner firm, on 18.11.2024, raising certain grounds, sought withdrawal of the letter dated 28.10.2024. But, the respondent authorities vide its letter dated 28.11.2024, issued under the hand of the respondent no. 3, had reiterated its demand to pay the amount of Rs. 1,05,06,286/-. The same was followed by summons dated 06.02.2025 issued in exercise of the powers under Section 70 of the CGST Act.
In the Table annexed in the notice issued in Form GST DRC-01A, the respondent authorities had provided the details month-wise regarding filing of the returns in Form GSTR- 3B. The Table had further provided a calculation of interest against the delay period [in days] in filing the GSTR-3B returns. The petitioner firm has nowhere disputed the calculation of the amount demanded towards the delayed payment of taxes under Section 50[1] of the CGST Act. It had only made a prayer through its representation dated 06.02.2024 to allow it to deposit the amount of Rs. 96,06,286/- in forty-eight equal monthly installments on the Page No.# 6/9 ground that if it was required to deposit such amount within a short period, its business would be severely affected. The petitioner firm was also asked to provide the details whether it had paid the Rs. 19,00,000/- or Rs. 28,00,000/-. The respondent authorities in its letter dated 22.10.2024 had provided the details like the date of deposit of the amount paid through DRC-03 to state that as per their records, only an amount of Rs. 19,00,000/- was paid. The said position was again reiterated in the letter dated 28.11.2024. The petitioner has not responded to any of those two letters.
A contention is advanced on behalf of the petitioners to the effect that denial to pay the demanded amount in forty-eight installment is unjust and arbitrary. Section 80 of the CGST Act, 2017 has provided that the Commissioner may, for reasons to be recorded in writing, extend the time for payment or allow payment of any amount due under the CGST Act, other than the amount due as per the liability self-assessed in any return, by a taxable person in monthly installments not exceeding twenty four, subject to payment of interest under Section 50 and subject to such conditions and limitations as may be prescribed. The proviso to Section 50 has provided that where there is default in payment of any one installment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and shall, without any further notice being served on the person, be liable for recovery.
In view of such statutory limitation on the part of the Commissioner conferred under Section 80, this Court finds that the rejection of the prayer of the petitioner firm to deposit the demanded amount in forty-eight equal monthly installments is not inconsistent with the provisions of Section 80 of the CGST Act. It is submitted by the learned counsel for the petitioner that in view of such refusal to allow forty-eight installments by the Commissioner, this Court can issue a direction to the respondent authorities to accept the demanded amount in forty-eight installments. Such submission made on behalf of the petitioners is not tenable. 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
Page No.# 7/9 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.
Mr. Mishra, learned counsel for the petitioners has submitted that another ground of rejection of the prayer to deposit in installments was that the demanded amount was quantified with regard to liability self assessed in the returns during the concerned period which, according to him, is not tenable. Mr. Mishra has further submitted that the petitioner firm is ready and willing to deposit the demanded amount in twenty-four equal monthly installments and such a request would fall within the four corners of the provisions of Section 80 of the CGST Act.
Mr. Jain, learned counsel appearing for the respondent nos. 2 – 6 has submitted that in the event such an application is filed by the petitioner firm, the same would be considered under the provisions of Section 80 of the CGST Act within a reasonable period of time. He has further submitted that if any ground regarding untenability relating to liability self-assessed is raised, the same would be duly examined in accordance with law.
In the above backdrop, Rule 158 of the CGST Rules, 2017 is of relevance and the same is quoted hereinbelow :-
Payment of tax and other amounts in instalments.-
[1] On an application filed electronically by a taxable person, in FORM GST DRC- 20, seeking extension of time for the payment of taxes or any amount due under the Act or for allowing payment of such taxes or amount in instalments in accordance with the provisions of Section 80, the Commissioner shall call for a report from the juri ictional officer about the financial ability of the taxable person to pay the said amount.
Page No.# 8/9 [2] Upon consideration of the request of the taxable person and the report of the juri ictional officer, the Commissioner may issue an order in FORM GST DRC-21 allowing the taxable person further time to make payment and/or to pay the amount in such monthly instalments, not exceeding twenty-four, as he may deem fit.
[3] The facility referred to in sub-rule [2] shall not be allowed where –
[a] the taxable person has already defaulted on the payment of any amount under the Act or the Integrated Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 or any of the State Goods and Services Tax Act, 2017, for which the recovery process is on; [b] the taxable person has not been allowed to make payment in instalments in the preceding financial year under the Act or the Integrated Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 or any of the State Goods and Services Tax Act, 2017; [c] the amount for which instalment facility is sought is less than twenty–five thousand rupees.
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
Page No.# 9/9 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.
With the observations made and the directions given above, the writ petition is disposed of. There shall, however, be no order as to cost.
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.