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2022 Supreme(Gau) 111
IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
Achintya Malla Bujor Barua, J.
M/s Veteran Security Services A Partnership Firm - Petitioner
Versus
The Union of India Rep. by The Finance Secretary to The Govt. of India, Ministry of Finance (Department of Revenue), North Block, New Delhi And Ors. – Respondents
WP(C)/924 of 2022
Decided On : 15-02-2022
Advocate Appeared:
For the Petitioner: Ms. N Gogoi
Point of Law : Inherent power of the Court under Article 226 of the Constitution of India to use a discretion but at the same time when it is statutorily provided by the departmental authorities that the maximum permissible.
Headnote:
Goods and Services Act, 2017 - Section 29 - Partnership firm - Business of providing security services - Contract agreement - Order of cancellation of registration - Petitioner M/S Veteran Security Services is a partnership firm engaged in business of providing security services - Petitioner is registered under the Goods and Services Act, 2017 bearing GSTIN No - Under the law petitioner firm is required to file monthly return under GST as per Form GSTR-1. A stand is taken that petitioner was providing security services to outlets of AIRCEL under a contract agreement but as because AIRCEL itself were out of business, a huge amount of payment is due to petitioner and because of such loss in business, petitioner could not pay required GST dues to department on time - Petitioner firm express their willingness to pay defaulted tax amount plus interest and penalty as may be assessed by department but because of precarious financial condition they are unable to pay it in one go and therefore, makes a request that petitioner be allowed to make necessary payments in 48 (forty eight) installments.
Finding of the Court:
Court are invoking discretionary power, we further provide that if petitioner firm do not comply with requirement of paying determined monthly installment within 7th of every month, there shall be a periodical review by departmental authority every month and in event of default, earlier order of cancellation may be revived by department without any further reference - determination of equal monthly installments to be paid by petitioner firm be determined by Assistant Commissioner, Division-2 and in doing do, petitioner firm may also be given a hearing and petitioner firm shall cooperate with authority - Upon such determination, requirement of payment - It is needless to say that on installments being determined and petitioner firm continuing to pay installments, order of cancellation of registration would have no effect, subject to any default if made by petitioner.
Result: Writ petition stands disposed
JUDGMENT :
Heard Mr. N Hawelia, learned counsel for the petitioner. Also heard Mr. S C Keyal, learned Standing Counsel for all the respondents.
2. The petitioner M/S Veteran Security Services is a partnership firm engaged in the business of providing security services. The petitioner is registered under the Goods and Services Act, 2017 bearing GSTIN No. 18AAGFV1352A2ZI. Under the law the petitioner firm is required to file monthly return under the GST as per the Form GSTR-1. A stand is taken that the petitioner was providing security services to the outlets of the AIRCEL under a contract agreement but as because AIRCEL itself were out of business, a huge amount of payment is due to the petitioner and because of such loss in business, the petitioner could not pay the required GST dues to the department on time.
3. In the process there is a default amounting to Rs.2,58,30,801/- for the period of March, 2018 upto November, 2020 along with applicable interest payable under Section 50(1) and penalty under Section 125 of the CGST Act, 2017. As the required tax amount had not been paid, the order of cancellation of registration dated 19.01.2021 was issued by the Superintendent, Guwahati-C-5 as per the provisions of Section 29 of the CGST Act, 2017. Being aggrieved by the order of cancellation of registration, the petitioner submitted an application for revocation of cancellation but the same was also rejected by the order dated 18.05.2021. Being aggrieved, this writ petition is instituted.
4. The petitioner firm express their willingness to pay the defaulted tax amount plus the interest and the penalty as may be assessed by the department but because of the precarious financial condition they are unable to pay it in one go and therefore, makes a request that the petitioner be allowed to make the necessary payments in 48 (forty eight) installments.
5. For the purpose, reference is made to the Circular No. 996/3/2015-CX dated 28.02.2015 of the Under Secretary to the Government of India in the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs.
Paragraph 5 of the said Circular provides as extracted below:
“5. It has been decided by the Board to allow recovery of arrears of taxes, interest and penalty in installments. The power to allow such payment in monthly installments shall be discretionary and shall be exercised by the Commissioners for granting sanction to pay arrears in installments upto a maximum of 24monthly installments and by the Chief Commissioners for granting sanction to pay arrears in monthly installments greater than 24 and upto a maximum of 36 monthly installments.”
Paragraph 7 of the said Circular provides as extracted below:
“7. The application for allowing payment of arrears shall be made to the jurisdictional Commissioner giving full justification for the same. The approval of the application should be in writing with due acknowledgment taken on record. The permission should clearly identify the number of installment and the month from which the payments of installments should begin and should also clearly stipulate that in case of default in payment of installments, the permission shall be withdrawn and action shall be taken for recovery of arrears.”
6. A reading of paragraph 5 of the Circular dated 28.02.2015 would make it discernable that the Commissioner of GST is empowered and has the discretion of granting sanction to pay arrear of the GST in installments upto maximum of 24 (twenty four) monthly installments and the Chief Commissioners are given the jurisdiction and authority to sanction the payment of the arrears in monthly installments greater than 24 (twenty four) upto a maximum of 36 (thirty six).
7. The petitioner firm in this writ petition claims that as because the precarious financial condition it would not be possible for them to pay the entire amount due plus the interest and penalty within 36 (thirty six) installments, which is the maximum limit for the Chief commissioner and ther
