Court denies M/s. P.K. Ores’ request to pay interest on delayed tax in installments, citing statutory provisions.

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Case Name:

M/s. P.K. Ores Pvt. Ltd. @ M/S. PK Minings Pvt. Ltd. vs. Commissioner of Sales Tax & Another (High Court of Orissa)

W.P.(C) No. 10335 of 2022

Date: 06th May 2022

Key Takeaways

• The court reinforced that interest on delayed tax payments is a statutory obligation and cannot be paid in installments if it arises from self-assessed returns.
• The ruling clarifies the limitations of Section 80 of the Odisha Goods and Services Tax Act regarding installment payments for self-assessed tax liabilities.
• The decision emphasizes the importance of timely tax compliance and the consequences of delays.

Issue

Is the Commissioner of CT&GST justified in rejecting the petitioner’s request to deposit the interest levied on account of belated deposit of admitted tax in installments?

Facts

• M/s. P.K. Ores Pvt. Ltd. filed self-assessed tax returns for the period from April 2019 to December 2019 but did so belatedly.
• The Commissioner of CT & GST issued a demand for interest amounting to ₹68,15,506 due to the late payment of tax.
• The petitioner sought to pay this interest in 36 installments, arguing that the delay was due to non-disbursal of funds from a government agency.
• The Commissioner rejected this request, stating that the law does not allow installment payments for self-assessed tax liabilities.

Arguments

Petitioner’s Arguments:

• The petitioner, represented by Ms. Kananbala Roy Choudhury, argued that the delay in tax payment was due to external factors (non-disbursal of funds from IDCOL).
• They contended that the Commissioner should have allowed the payment of interest in installments, as it would ease their financial burden.

Respondent’s Arguments:

• The respondent, represented by Mr. Sidharth Shankar Padhy, argued that the statutory provisions under Section 80 of the Odisha Goods and Services Tax Act explicitly prohibit installment payments for amounts due as per self-assessed returns.
• The respondent emphasized that the law mandates interest on delayed payments and that the petitioner had a statutory obligation to pay this interest on their own.

Key Legal Precedents

• Section 80 of the Odisha Goods and Services Tax Act: This section allows the Commissioner to permit installment payments for certain dues but explicitly excludes amounts due from self-assessed returns.
• Section 50 of the Odisha Goods and Services Tax Act: This section outlines the obligation to pay interest on delayed tax payments, which is automatic and does not require a separate order.

Judgement

The High Court of Orissa dismissed the writ petition filed by M/s. P.K. Ores Pvt. Ltd., affirming the Commissioner’s decision to reject the request for installment payments of interest. The court reasoned that the statutory framework does not allow for such flexibility in cases of self-assessed tax liabilities. The court emphasized that the petitioner was obligated to pay the interest as per the law, and the rejection of the installment request was justified.

FAQs

Q1: What does this ruling mean for M/s. P.K. Ores?

A: M/s. P.K. Ores must pay the interest amount of ₹68,15,506 in full, as the court ruled that they cannot pay it in installments.

Q2: Can the Commissioner allow installment payments for other types of tax dues?

A: Yes, the Commissioner can allow installment payments for certain dues, but not for amounts due from self-assessed returns as per Section 80 of the Odisha Goods and Services Tax Act.

Q3: What happens if a taxpayer fails to pay the interest on time?

A: If a taxpayer fails to pay the interest on time, they may face further penalties or legal actions as prescribed under the tax laws.

Q4: Why was the delay in payment significant in this case?

A: The delay in payment was significant because it triggered the statutory obligation to pay interest, which the court ruled must be fulfilled without the option for installments.