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GST: Kerala HC allows an Instalment facility to pay the Admitted Tax with interest to the taxpayer hit by COVID-19 [Read Order]

Admitted Tax - COVID 19 - interest - taxscan

The Kerala High Court allowed an instalment facility to pay the admitted tax with interest to the taxpayer hit by financial difficulties due to COVID-19.

The petitioner, Pazhayidom Food Ventures (P) Ltd.  is registered as a service provider under the Goods and Service Tax Act. The petitioner said that while he intends to pay the arrears of tax due for the assessment year 2018-2019, without contesting the same, the respondents have expressed their inability to permit him to pay the arrears of tax in instalments.

It is the further contention of the petitioner that on account of the present COVID-19 pandemic situation, he is not in a position to generate the funds necessary for making a lump sum payment of the admitted tax for the said period, and it is therefore that he seeks a direction from the Court to permit the petitioner to file the returns without paying the entire admitted tax, but ensuring that the payment of admitted tax, together with interest thereon and applicable late fees etc, is made on or before 31 March, 2021.

However, the learned Standing counsel for the respondents pointed out that the provisions of the Act do not provide for the payment of the admitted amount shown in the return in instalments, and hence the relief sought for by the petitioner cannot be granted in view of the express provisions of the statute.

The Single judge bench of Justice A.K. Jayssankaran Nambiar directed the respondent authority to accept the belated return filed by the petitioner for the period November 2018 to March 2019, without insisting on payment of the admitted tax declared.

“I also note that during the pendency of this Writ Petition, the petitioner has established its bonafides by effecting a payment of Rs.4 lakhs towards the tax liability for the period 2018-2019,” the bench noted.

Therefore, the bench directed the respondents to adjust the amount of Rs. 4 Lakhs paid by the petitioner during the pendency of this writ petition, towards the admitted tax liability, and thereafter permit him to discharge the balance tax liability, inclusive of any interest and late fee thereon, in equal successive monthly instalments commencing from 25th August 2020 and culminating on 25th March, 2021.

The bench also clarified that if the petitioner defaults in any single instalment, he will lose the benefit of this judgment and it will be open to the respondent to proceed with recovery proceedings for realisation of the unpaid tax, interest and other amounts.

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