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Case Law Details

Case Name : Angel Label Division & Angel Zippel (HUF) Vs Assistant Commissioner (ST) (FAC) (Madras High Court)
Appeal Number : Writ Petition No.8193 of 2024
Date of Judgement/Order : 26/03/2024
Related Assessment Year :

Angel Label Division & Angel Zippel (HUF) Vs Assistant Commissioner (ST) (FAC) (Madras High Court)

In a recent judgment, the Madras High Court addressed the dispute between Angel Label Division & Angel Zippel and the Assistant Commissioner regarding GST interest liability. The petition challenged a bank attachment notice issued on 24th February 2024.

The petitioner, a registered entity under GST enactments, faced cancellation of registration due to non-filing of returns. However, after remitting tax dues and filing returns up to the cancellation date, the registration was reinstated. Despite this, interest liabilities remained, leading to a dispute over outstanding amounts.

The petitioner, citing financial difficulties, requested to pay the interest liability in 15 installments. The court, considering Section 80 of the Tamil Nadu Goods and Services Tax Act, acknowledged the Commissioner’s authority to permit installment payments but clarified that it didn’t extend to self-assessed tax liabilities.

Acknowledging the payments made by the petitioner towards tax and interest liabilities, the court devised a settlement plan. The petitioner was directed to pay a specified sum by a certain date and the remaining balance in monthly installments. Non-compliance would empower the first respondent to pursue recovery through legal means.

The judgment of the Madras High Court in the case of Angel Label Division & Angel Zippel vs. Assistant Commissioner provides clarity on the scope of installment payments for GST interest liabilities. It balances the petitioner’s financial constraints with the need for timely settlement, outlining specific terms for compliance. This case sets a precedent for similar disputes, emphasizing the importance of adherence to statutory obligations while accommodating genuine financial hardships.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

A bank attachment notice dated 24.02.2024 is challenged in this writ petition.

2. The petitioner is a registered person under applicable GST enactments. On account of non-filing of returns, the petitioner’s GST registration was cancelled by order dated 20.09.2017. Such order was revoked after the petitioner remitted tax dues and filed returns up to to the date of cancellation. Since such tax liability was discharged belatedly, the petitioner became liable to pay interest thereon. As against the total interest liability of Rs.75,84,264/-, a sum of Rs.7,20,581/- was paid by the petitioner leaving a balance of Rs.68,63,683/-.

3. Learned counsel for the petitioner submits that the petitioner is in great financial difficulty and, therefore, requires time for payment of amounts outstanding towards interest. He makes a request that the petitioner be permitted to discharge the interest liability in 15 equal installments.

4. Mr. C. Harsha Raj, learned Additional Government Pleader, accepts notice for the first respondent.

5. By referring to Section 80 of the Tamil Nadu Goods and Services Tax Act, 2017, he submits that the Commissioner is empowered to permit payment of tax in instalments, but such authority does not extend to self assessed tax liability.

6. The admitted position is that the tax liability pertaining to the relevant periods was discharged by the petitioner, albeit belatedly. The petitioner asserts that a sum of about Rs.7.20 lakhs was paid towards discharge of interest liability leaving a balance of about Rs.68 lakhs. By taking into account that the tax liability was discharged and the petitioner also paid about Rs.7.20 lakhs towards interest liability, it is just and appropriate that conditions be imposed subject to which the petitioner is permitted to pay the interest liability in installments.

7. Therefore, W.P.No.8193 of 2024 is disposed of on the following terms:

(i) the petitioner shall pay a sum of Rs.10,00,000/- towards outstanding interest liability on or before 15.04.2024. Subject to and upon receipt of this sum by the first respondent, the impugned bank attachment and garnishee notices issued for recovery of such interest liability shall stand withdrawn.

(ii) The petitioner shall pay the remaining outstanding interest liability in 11 equal monthly installments on or before the 15th of every succeeding month. In case of default, it is open to the first respondent to issue fresh bank attachment or garnishee orders or take any other measures for recovery of dues in accordance with law. Consequently, connected miscellaneous petition is closed. No costs.

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