District Collector Cannot Grant Sales Tax Dues Instalments under Kerala General Sales Tax Act: Kerala HC directs to approach STO

In a ruling by Justice Dinesh Kumar Singh of the Kerala High Court, it was determined that the District Collector does not have the authority to approve installment plans for sales tax liabilities under the Kerala General Sales Tax Act. Instead, the High Court granted permission for individuals to submit applications directly to the Sales Tax Officer (STO) in order to settle the petitioner’s dues in six installments.

The petitioner has submitted a writ petition under Article 226 of the Indian Constitution, challenging the notices issued for the recovery of Sales Tax dues, including interest and collection charges. These dues pertain to the period spanning from August 31, 2022, to August 11, 2023, and are associated with the sale of Indian Made Foreign liquor for which the petitioner holds a license.

The counsel of the petitioner submitted that outstanding tax amount is Rs.1,29,58,830/- with interest of Rs.14,69,851/- and collection charge of Rs.10,82,151/- with processing cost of Rs.170/- (Total of Rs.1,55,11,002/-) as per the notice dated 11.08.2023. The petitioner moved an application to the District Collector praying that the petitioner should be allowed to pay the outstanding tax amount with interest in fifty instalments.

The bench observed that under the provisions of the Kerala General Sales Tax Act and Rules, the District Collector has no authority or power to grant instalments for payment of the tax dues. The Kerala General Sales Tax Acts and Rules empowers the assessing authority ie.,the Sales Tax Officer to grant 6 instalments as per the provisions of Rules 30(B) of the KGST Rules.

Considering these circumstances, the High Court has granted permission to the petitioner to submit an application to the fourth respondent, seeking the option of six installments as outlined in Rule 30(B) of the KGST Rules. This application must be filed within ten days from the present date.

Additionally, the High Court has instructed that the Sales Tax Officer (STO), who is the fourth respondent in this matter, should render a decision on the application in accordance with the law within 15 days from the date of the directive. Moreover, for a duration of one month, the challenged notices should not be enforced.

To Read the full text of the Order CLICK HERE

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