M/S.Mideast Integrated Steel LTD vs. Union Of INDIA

Held

The Court held that the remedy under Section 80 of the CGST Act, read with Rule 158, should be made available to the petitioner-assessee even when the liability is admitted and no adjudication has taken place, provided the petitioner-company is prepared to pay its liability by reasonable installments. The Court reasoned that when a taxpayer accepts its liability and proposes a payment plan, the statutory remedy for installment payments should not be denied solely on the basis of the absence of a formal adjudication order. The ratio decidendi is that the intent of Section 80 is to provide a mechanism for taxpayers to manage their tax liabilities when they acknowledge them, and this purpose should be facilitated. The Court directed that if the petitioners make an application under Section 80 within two weeks, the Commissioner shall decide the same in accordance with law within four weeks. In the interim, the petitioners were directed to file an undertaking not to transfer personal property of the Directors or dispose of company property without permission, and no arrest of Directors would occur until the Commissioner's decision.

Facts

The petitioners filed a writ petition seeking a direction to the opposite parties (revenue authorities) to favorably consider their request for payment of admitted Goods and Services Tax (GST) liabilities in reasonable installments. The petitioners were represented by Mr. Harin P. Raval, Senior Counsel, and the opposite parties by Mr. T.K. Satapathy, Senior Standing Counsel. The Court noted that the petitioners should make an application before the Commissioner under Section 80 of the Central Goods and Service Tax Act, 2017, read with Rule 158 of the Rules, within two weeks. The revenue argued that Section 80 is only available after adjudication, but the Court opined that it should be available even without adjudication if the liability is admitted and the company is willing to pay in installments, subject to the Commissioner's satisfaction.

Key Issues

1. Whether the remedy under Section 80 of the Central Goods and Service Tax Act, 2017, read with Rule 158 of the Rules, is available to a petitioner who admits its GST liability and seeks to pay it in installments, even in the absence of a formal adjudication order? Petitioner's contention: The petitioners argued that they are willing to pay their admitted GST liabilities and are seeking to do so in reasonable installments. They sought a direction for the authorities to consider this request favorably. Revenue's contention: The revenue argued that the remedy under Section 80 of the CGST Act is available only after adjudication. Therefore, the petitioners should not be allowed to avail this remedy at this stage.