M/S Veteran Facility Management Services PVT LTD vs. The Union Ofindia And 5 Ors

Held

The Court acknowledged the petitioner's precarious financial condition and the potential consequence of their business ending if payment in installments was not allowed. While recognizing the statutory limit of 36 installments set by the departmental circular, the Court decided to invoke its discretionary power under Article 226 of the Constitution to provide succor to the petitioner and enable them to remain in business. The Court directed the Assistant Commissioner, Guwahati, Division-2, to evaluate the total amount due, including the principal, interest, and penalty. This assessed amount is to be divided equally by 48, and the resulting monthly installment amount is to be determined and communicated to the petitioner. The petitioner is required to pay these monthly installments by the 7th of every month, commencing from March 1, 2022. The Court stipulated that if the petitioner defaults in paying any installment by the 7th of the month, the departmental authority will conduct a monthly review, and the earlier order of cancellation of registration may be revived without further reference. The Court explicitly stated that upon determination of installments and continued payment by the petitioner, the order of cancellation of registration would have no effect, subject to compliance.

Facts

The petitioner, M/s Veteran Facility Management Services Pvt. Ltd., is a partnership firm registered under the GST Act, 2017. The firm defaulted in paying GST dues amounting to Rs. 2,25,09,077/- for the period April 2018 to September 2021, along with applicable interest and penalty. Consequently, the Superintendent, Central Goods and Service Tax, Guwahati, issued an order cancelling the petitioner's registration on December 30, 2020. The petitioner's application for revocation of this cancellation was also rejected on April 15, 2021. The petitioner, citing financial difficulties, sought to pay the defaulted amount in 48 installments, referencing a circular allowing payment in installments.

Key Issues

1. Whether the Court can exercise its discretionary power under Article 226 of the Constitution of India to allow the petitioner to pay GST arrears, interest, and penalty in 48 installments, exceeding the maximum limit of 36 installments stipulated by the departmental circular? The petitioner argued that due to their precarious financial condition resulting from losses in business, they are unable to pay the entire defaulted amount in one go. They relied on Circular No. 996/3/2015-CX dated 28.02.2015, which allows for payment of arrears in installments, with Commissioners empowered up to 24 installments and Chief Commissioners up to 36 installments. The petitioner contended that their situation necessitates more than 36 installments and sought the Court's intervention to permit 48 installments. The respondents (Revenue) initially raised an apprehension regarding the petitioner's past conduct, suggesting it was not confidence-inspiring, but ultimately agreed to the proposition of extended installments after conferring with authorities.