Akshaya Consortium vs. The Assistant Commissioner (St)

Held

The Court acknowledged the petitioner's failure to discharge its tax liability, regardless of the reasons. It noted that the petitioner's attempt to seek installments under Section 80 occurred after recovery proceedings were initiated, and it was not the case that they approached the authorities for installments prior to such proceedings. However, considering the interim direction granted on 05.10.2026, where the petitioner was directed to deposit 20% of the tax dues (Rs. 37,17,900/-) within three weeks, and the petitioner's compliance with this condition, the Court decided to grant relief. The Court, while not inclined to appreciate the petitioner's grounds that the recovery was not tenable in law, agreed to consider payment of the balance tax in installments. The Court granted six monthly installments for the payment of the balance amount of Rs. 29,74,000/-, commencing from 10.11.2026. It was made clear that any default in payment of an installment would entitle the respondent authorities to recover the entire outstanding amount. The Writ Petition was disposed of with these directions.

Facts

The petitioner, Akshaya Consortium, a partnership firm registered under the APGST Act and engaged in works contract services, faced severe business losses due to the Covid-19 pandemic, leading to operational liquidity issues. For the period February 2024, the petitioner declared a tax liability of Rs. 44,99,712/- in GSTR-1 but could not pay it as payments from clients were not received. The Assistant Commissioner, ST, issued Form GSTR 3A and ASMT 13 for non-filing of returns and non-payment of tax. The firm's registration certificate was cancelled. Subsequently, the bank account of the petitioner was attached, and Rs. 7,81,815/- was recovered, leaving a balance due of Rs. 37,17,897/-. The Deputy Assistant Commissioner then issued a notice attaching the primary residential properties of the petitioner's partner. The petitioner attempted to file an application for installment payments under Section 80 of the Act but was prevented by the GST portal due to an existing recovery ID.

Key Issues

1. Whether the petitioner's inability to file an application for installment payments under Section 80 of the APGST Act due to the GST portal error, after recovery proceedings were initiated, warrants judicial intervention to allow for such installments? 2. Whether the Court should grant relief to the petitioner to pay the outstanding tax dues in installments, considering the circumstances of business losses and the petitioner's attempt to comply with tax obligations? Petitioner's arguments: The petitioner contended that they suffered unforeseen business losses due to the Covid-19 pandemic, which crippled their liquidity. They were unable to pay the declared tax liability for February 2024. The petitioner also argued that they attempted to file an application for installment payments under Section 80 but were prevented by a technical error on the GST portal, indicating that recovery proceedings had already commenced. They sought an opportunity to pay the arrears in installments. Revenue's arguments: The judgment does not explicitly record arguments made by the revenue. However, the actions taken by the revenue authorities (issuance of notices, cancellation of registration, attachment of bank account and property) indicate their stance on enforcing tax recovery due to non-payment and non-filing of returns.