The Orissa High Court bench of Justice Jaswant Singh & Justice Murahari Sri Raman has held that there is no scope for the Commissioner of CT & GST to entertain application for grant of instalment to deposit the interest levied on account of belated deposit of admitted tax as per self-assessed returns furnished in terms of section 39 read with section 59 of the CGST / OGST act under section 80 read with rule 158.
1. Petitioner : M/s. P.K. Ores Pvt. Ltd, M/S. PK Minings Pvt. Ltd.
2. Respondents : Commissioner of Sales Tax & Another
3. Appeal Type/ No. : W.P.(C) No. 10335 of 2022
4. CORAM : 1. HON'BLE JUSTICE JASWANT SINGH, 2. HON'BLE JUSTICE MURAHARI SRI RAMAN
5. Council For Petitioners : Ms. Kananbala Roy Choudhury, Advocate
6. Council For Respondents : Mr. Sidharth Shankar Padhy, Advocate for CT & GST Organization
7. Date of pronouncement : 06.05.2022
8. Facts: The case of the petitioner is that in terms of the Section 39 read with Section 59 of the OGST Act, returns for the period 2019-20 in Form GSTR-3B and GSTR-1 have been furnished on self-assessment. While undertaking the scrutiny of said self-assessed returns furnished for each tax periods as per Section 39, the CT & GST Officer noticed that the petitioner has filed the returns belatedly.
The petitioner has alleged that non-payment of admitted tax is attributed to non-disbursal of substantial amount standing due from IDCOL, a Government Agency. It is submitted by Ms. Kananbala Roy Choudhury, counsel for the petitioner that as of now, entire tax component stands deposited, though belatedly.
The petitioner submitted that the petitioner is not in a position to discharge demand of interest as raised by the CT&GST Organisation on account of such belated deposit of admitted tax. Therefore, the petitioner prayed before the Commissioner of CT&GST, Odisha to allow it to discharge interest demand to the tune of Rs.68,15,506/- by instalments.
The Commissioner of CT & GST rejected the prayer to allow the petitioner to discharge the liability towards the huge burden of interest in installments.
The petitioner submitted that the Commissioner of CT&GST being vested with power under Section 80 of the OGST Act ought not to have rejected its application in Form GST DRC-20 filed in consonance with Rule 158 of the OGST Rules and facilitated the petitioner by allowing it to discharge the liability towards the huge burden of interest. It is submitted at the bar that the rejection of prayer for deposit of interest demand in instalments by the Commissioner of CT&GST is outcome of not only arbitrary exercise of power but misreading of provision of the statute.
The issue raised in the present case is: "WHETHER THE COMMISSIONER OF CT&GST IS JUSTIFIED IN REJECTING THE PRAYER OF THE PETITIONER TO DEPOSIT THE INTEREST LEVIED ON ACCOUNT OF BELATED DEPOSIT OF ADMITTED TAX AS PER SELF-ASSESSED RETURNS FURNISHED IN TERMS OF SECTION 39 READ WITH SECTION 59 OF THE CGST/OGST ACT IN INSTALMENT UNDER SECTION 80 READ WITH RULE 158?"
9. Nature of Issue : Payment of Tax or Interest in Installment
10. Industry : Not industry specific
11. Held : Since interest is a part of tax and such tax being belated payment in respect of self-assessment, Section 80 of the OGST Act clearly excludes grant of instalment under the present fact-situation.
However, the Commissioner is not conferred with power to allow such instalment in respect of amount due as per self-assessment return(s) furnished. Section 80 empowers the Commissioner to grant permission only to the taxable person to make payment of any amount due on instalment basis, on an application filed electronically in Form GST DRC-20 as prescribed under Rule 158. The Commissioner after considering the request by the taxable person in Form GST DRC-20 and report of the jurisdictional officer, may issue an order in Form GST DRC-21, allowing the taxable person either extend the time or allow payment of any amount due under the Act on instalment basis. This provision, therefore, applies to amounts due other than the self-assessed liability shown in any return. The instalment period shall not exceed 24 months.
The taxable person shall also be liable to pay prescribed interest on the amount due from the first day such tax was due to be payable till the date tax is paid. In view of proviso to Section 80, if default occurs in payment of any one instalment, the taxable person would be required to pay the whole outstanding balance payable on such date of default itself without further notice. There was, therefore, no scope for the Commissioner of CT&GST to entertain application for grant of instalment.
In view of the above discussion, The Commissioner of CT&GST is justified in rejecting the prayer of the petitioner to deposit the interest levied on account of belated deposit of admitted tax as per self-assessed returns furnished in terms of Section 39 read with Section 59 of the CGST/OGST Act in instalment under Section 80 read with Rule 158. The writ petition, thus, being devoid of any merit, is dismissed.
12. In favour of : Respondent
13. Case Law Refereces : 1. EID Parry (India) Ltd. Vrs. Assistant Commissioner of Commercial Taxes, (2005) 141 STC 12 (SC).
2. Haji Lal Mohammad Biri Works Vrs. State of Uttar Pradesh, (1973) 32 STC 496 (SC);
3. Sales Tax Officer Vrs. Dwarika Prasad Sheo Karan Dass, (1977) 39 STC 36 (SC)
4. Commissioner of Sales Tax Vrs. Qureshi Crucible Centre, (1993) 89 STC 467 (SC)
5. Commissioner of Trade Tax Vrs. Kanhai Ram Thekedar, (2005) 141 STC 1 (SC)
6. Garg Associates Pvt. Ltd. Vrs. Commissioner of Trade Tax, (2005) 139 STC 368 (All)
7. J.K. Synthetics Ltd. Vrs. Commercial Tax Officer, (1994) 94 STC 422 (SC),
8. Prahlad Rai Vrs. Sales Tax Officer, (1992) 84 STC 375 (SC)
9. State of Karnataka Vrs. Karnataka Pawn Brokers Association, (2018) 6 SCC 363.
10. Naili Kanta Muduli Vrs. Bhubaneswar Development Authority, 2008 (II) OLR 18 (Ori)
11. Pratibha Processors Vrs. Union of India, AIR 1997 SC 138 = (1996) 11 SCC 101,
12. Bhai Jaspal Singh Vrs. Assistant Commissioner of Commercial Taxes, (2010) 35 VST 456 (SC)
13. Alok Shanker Pandey Vrs. Union of India, AIR 2007 SC 1198 = (2007) 3 SCC 545
14. Khazan Chand Vrs. State of Jammu & Kashmir, (1984) 56 STC 214 (SC)
15. Megha Engineering & Infrastructures Ltd. Vrs. Commissioner of Central Tax, Writ Petition No.44517 of 2018,
16. Pazhayidom Food Ventures (P) Ltd. Vrs. Superintendent Commercial Taxes, W.P. (C) No. 14275 of 2020 (H), Decided on July 24, 2020 reported at 2020 SCC OnLine Ker 12929,
17. Baidyanath Ayurved Bhawan v. Excise Commissioner, U.P., AIR 1971 SC 378,
18. Rowlatt, J., in Cape Brandy Syndicate v. Inland Revenue Commissioners, [1921] 1 KB 64 (at p. 71)
19. Cooke Vrs. Charles A Vogeler Co., (1901) AC 102 (HL); Cape Brandi Syndicate Vrs. Inland Revenue Commissioners, (1921) 1 KB 64;
20. Canadian Eagle Oil Co. Vrs. King, (1945) 2 AllER 499 (HL);
21. Inland Commissioners Vrs. Ross & Coulter, Re Bladnoch Distillery Co., (1948) 1 AllER 616 (HL);
22. Keshavji Ravji & Co. Vrs. Commissioner of Income Tax, (1990) 183 ITR 1 (SC);
23. Orissa State Warehousing Corporation Vrs. Commissioner of Income Tax, (1999) 4 SCC 197;
24. State of Andhra Pradesh Vrs. Gouri Shankar Modern Rice Mill, (2006) 147 STC 370 (AP).
25. Union of India Vrs. Deoki Nandan Aggarwal, AIR 1992 SC 96,
26. Nathi Devi Vrs. Radha Devi Gupta, (2005) 2 SCC 271 = AIR 2005 SC 648
14. Relevant Act/ Rules/ Forms : 1. Article 226/227 of the Constitution of India
2. Section 49 of the Odisha Goods and Services Tax Act, 2017,
3. Section 50 of the Odisha Goods and Services Tax Act, 2017,
4. Section 80 of the Odisha Goods and Services Tax Act, 2017,
5. Rule 158 of the Odisha Goods and Services Tax Rules, 2017
6. GST DRC-07
7. GST DRC-20
15. Database Citation : HC-GW-385-2022-OD
