Stj'S Engineers vs. The State Tax Officer

Facts

The petitioner, STJ's Engineers, represented by a legal heir, approached the High Court of Kerala seeking permission to pay a tax liability in installments. The original proprietor of the petitioner expired on November 15, 2021. Due to delays in obtaining legal heirship certificates, the petitioner could not avail an amnesty scheme. The 2nd respondent, the Deputy Commissioner of State Tax, issued a Prohibitory Order (Ext.P5) for the collection of Rs. 5,11,699/-. The petitioner contended that Rule 51 of the Kerala Value Added Tax Rules, 2005, allows assessing officers to grant payment in six installments and prayed for a similar facility for the disputed amount, along with accrued interest and costs.

Held

The Court, having considered the limited nature of the relief sought by the petitioner and the arguments presented, decided to dispose of the writ petition. The Court found merit in the petitioner's request for an installment payment facility, acknowledging the circumstances presented. The Court directed the petitioner to pay the total amount of Rs. 5,11,699/- in six equal monthly installments. The first installment was mandated to be paid on or before January 16, 2023, with subsequent installments due by the 16th of each succeeding month. The petitioner was also held liable to pay any accrued interest and costs. The Prohibitory Order (Ext.P5) was stayed to facilitate compliance. The Court explicitly stated that if the petitioner defaults on any installment, the respondents are at liberty to resume recovery proceedings. The ratio decidendi is that in exceptional circumstances, particularly involving the death of the assessee and demonstrable efforts to comply, a High Court can direct installment payments of tax liabilities, even if not strictly within the scope of a specific amnesty scheme, by invoking its equitable jurisdiction and considering relevant procedural rules.

Key Issues

1. Whether the petitioner is entitled to pay the outstanding tax liability of Rs. 5,11,699/- along with interest and costs in six equal monthly installments, considering the circumstances of the original proprietor's demise and the delay in availing the amnesty scheme? (Question of mixed law and fact, turning on the interpretation and application of Rule 51 of the Kerala Value Added Tax Rules, 2005, and principles of equity). Petitioner's arguments: The petitioner argued that due to the death of the proprietor and subsequent delays in obtaining legal heirship documents, they missed the opportunity to utilize the amnesty scheme. They relied on Rule 51 of the Kerala Value Added Tax Rules, 2005, which permits the assessing officer to allow payment of assessed amounts in installments, and sought this facility for the amount demanded in Ext.P5, including interest and costs. Revenue's arguments: The learned Senior Government Pleader was heard. No specific arguments or reliance on provisions/precedents were recorded for the revenue.