Gujarat HC: Assessee Can Pay Pending GST Liabilities in Installments

The Gujarat High Court overruled the Adjudicating Authority’s ruling and allowed an assessee to pay their tax debt in instalments, therefore releasing the provisional attachment of the taxpayer’s bank account.

The aforesaid order which Justice NV Anjaria and Devan M Desai delivered would come in response to the special civil application in which the applicant would urge the court for permission to do the payment for the due tax amount to the tune of Rs. 2,13,04,290/- in 12 equal instalments.

The applicant, Nirajkumar Nareshkumar Lakhyani, who is in the business of trading metal scape, has a valid registration certificate under the Central Goods and Services Tax Act, 2017, and the Gujarat Goods Services and Tax Act, 2017.

On November 29, 2022, officers from the respondent’s office went to Lakhyani’s business premises to enquire about specific transactions, only to find the premises closed. As a consequence, a summons was issued in accordance with Section 70(1) of the Central Goods and Services Tax Act of 2017 and the Gujarat Goods and Services Tax Act of 2017. The authorities then attached Lakhyani’s bank account.

While the hearing, Advocate Vaibhavi K Parekh, representing the applicant, gave an undertaking which the applicant filed. The undertaking said that the State Tax Officer (3) Enforcement, Division 12 (respondent No.3), had furnished the unsigned statement of disputed ITC dated December 2022, showing the total due amount of Rs. 2,13,04,290/- (CGST: Rs. 1,06,52,145/- + SGST: Rs. 1,06,52,145/-).

At the hearing, Advocate Vaibhavi K Parekh, representing the petitioner, proposed an undertaking filed via the applicant. The undertaking mentioned that the State Tax Officer (3) Enforcement, Division 12 (respondent No.3), had furnished an unsigned statement of disputed input tax credit in December 2022, showing a total due amount of Rs. 2,13,04,290/- (CGST: Rs. 1,06,52,145/- + SGST: Rs. 1,06,52,145/-).

Under an oath, the applicant promised to pay the liability of INR 2,13,04,290/- (CGST: Rs. 1,06,52,145/- + SGST: Rs. 1,06,52,145/-) in fifteen equal monthly instalments beginning from May 2023. The applicant described their readiness and willingness to settle the demand for the GST Input Tax Credit (ITC) which the authority raised, without prejudice to their rights and contentions in future adjudicatory proceedings.

“In view of the above position arising where the petitioner would be paid within the span of 15 equal monthly instalments the tax demanded, order dated 30.11.2022 provisionally attaching Current Bank Account No.045361900003074 of the petitioner held with the YES Bank Limited, is hereby set aside. As a consequence, the attachment of the abovementioned bank account shall be lifted forthwith,” the court articulated during permitting the petition.

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“In future proceedings, if any, the rights and contentions of both the sides shall remain open,” the court finished.