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Orissa High Court: Commissioner Can’t Allow Interest Payment Deposit in Instalments

In the case of M/s. P.K. Ores Pvt. Ltd. @ M/S. PK Minings Pvt. Ltd. Versus Commissioner of Sales Tax, (Case No: W.P.(C) No. 10335 of 2022), the Commissioner of CT & GST does not have the authority to permit the deposit of interest payments in instalments, according to the Orissa High Court’s bench of Justices Jawant Singh and Murahari Sri Raman. The petitioner claimed that self-assessment returns on Forms GSTR-3B and GSTR-1 were filed for the fiscal year 2019–20 in line with Section 39 read with Section 59 of the OGST Act. The CT & GST Officer observed that the petitioner had filed the returns beyond the deadline when evaluating self-assessed returns for each tax period.

Facts: The petitioner claimed that the refusal of IDCOL, a government organization, to pay out a sizable amount owed is the cause of the non-payment of accepted tax. The petitioner claimed that, although being late, the entire tax component had been deposited. The petitioner claimed that due to the acknowledged tax’s tardy deposit, the petitioner was unable to satisfy the interest demand made by the CT & GST Organization. As a result, the petitioner requested permission from the Commissioner of CT & GST, Odisha, to be able to pay off an interest demand of Rs. 68,15,506 in instalments. The Commissioner of CT & GST denied the petitioner’s request to be released from responsibility for the significant burden of interest. The petitioner argued that the Commissioner of CT & GST should not have denied the application since he had the authority to do so under Section 80 of the OGST Act. The Commissioner of CT & GST’s denial of the request for the deposit of interest demand in instalments was the result of both an arbitrary use of his authority and a misinterpretation of a statutory provision. The department argued that the Commissioner of CT & GST’s well-reasoned order does not call for leniency. There was no justification or opportunity to grant the petitioner’s request for 36 instalments. This would be against the law’s directive. The question at hand was whether the Commissioner of CT & GST was correct in denying the petitioner’s request to pay the interest assessed for the late deposit of admitted tax according to self-assessed returns.

Judgement: The court determined that because interest is a component of tax and because self-assessment tax is a belated payment, Section 80 of the OGST Act expressly forbids the granting of instalments. The Commissioner does not have the authority to grant such an instalment in relation to the amount owed as stated in the self-assessment return that was submitted, the court said. Only the taxable person may request authorization under Section 80 to pay any sum payable in instalments, and this request must be made electronically on Form GST DRC-20 in accordance with Rule 158. After taking into account the taxable person’s request on Form GST DRC-20 and the jurisdictional officer’s report, the Commissioner may issue an order on Form GST DRC 21. The commissioner may permit the taxable person to pay any sum payable under the Act in instalments or to extend the deadline. Other than the self-assessed liability disclosed in any return, Section 80 applies to amounts owed. The total length of the instalment period is 24 months. “Additionally, from the first day the tax was supposed to be paid until the day the tax is paid, the taxpayer is responsible for paying the specified interest on the sum owed. A taxable person would be compelled to pay the entire outstanding balance due on the date of default itself without further notice due to the proviso of Section 80, which states that if any one instalment is not paid on time, the default must be remedied. Therefore, the Commissioner of CT & GST had no room to consider a request for an instalment award “the tribunal added.

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JUDGEMENT REVIEWED BY SNIGDHA DUBEY

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