2024 (1) TMI 375 - HC - GST

GST Interest Demand Sustained with Flexible Payment Schedule Allowing Three Installments Over Three Months

HC upheld GST interest demand but granted petitioner a 3-month extended payment period in three instalments. First instalment of Rs. 80,000/- due by ... Extension of time for payment of tax demand - payment of interest for delayed payment of GST - exercise of writ jurisdiction to grant interim time for compliance - liberty to initiate recovery proceedings on defaultExtension of time for payment of tax demand - exercise of writ jurisdiction to grant interim time for compliance - Whether the petitioner should be permitted further time and an instalment schedule to pay the interest demanded for delayed GST payment. - HELD THAT: - The Court noted that the respondent issued a sudden notice demanding interest for non-payment of GST for the period 2017-2018 to 2021-2022 and that the petitioner had paid only a part of the demanded amount. Considering that the two-day period originally fixed for payment was insufficient in the circumstances and having regard to the partial payment already made, the Court exercised its writ jurisdiction to grant a limited extension for compliance. The Court fixed a three-month period and directed payment by specified instalments, while making clear that failure to pay as directed would permit the respondent to commence recovery proceedings. The order balances the need for prompt tax recovery with the petitioner's practical difficulty in making a lump-sum payment on short notice. [Paras 7, 8, 9]Petitioner granted three months' time to pay the balance interest in specified instalments; failure to pay on due dates entitles respondent to initiate recovery proceedings.Final Conclusion: Writ petition disposed by permitting the petitioner three months' time to pay the balance interest demanded for the years 2017-2018 to 2021-2022 in specified instalments, with liberty to the respondent to initiate recovery proceedings on default; no costs. Issues involved: Challenge to impugned order u/s 6.10.2023 demanding payment of GST interest, sufficiency of time period for payment.Summary:The writ petition challenged an order dated 06.10.2023 demanding payment of GST interest. The petitioner, a service provider to financial institutions, faced delays in GST payment for 2017-2018 to 2021-2022 due to technical glitches. The respondent issued a notice demanding Rs. 2,80,247/- as interest, with a 2-day payment deadline. The petitioner argued for more time, citing sudden notice issuance. The respondent, while reluctant, agreed to a reasonable extension. The Court, after hearing both sides, noted the petitioner's financial constraints and granted a 3-month payment period in three instalments: Rs. 80,000/- by 20.12.2023, Rs. 80,000/- by 20.01.2024, and Rs. 93,580/- by 20.02.2024. Failure to meet these deadlines would allow the respondent to initiate recovery proceedings. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.