Assessee allowed to adjust the tax dues payable in 24 monthly installments with ITC against the last installment

The Hon'ble Meghalaya High Court in JUD Cements Ltd. & Anr. v. the Commissioner, CGST, Shillong [WP (C) No. 344/2021 dated December 7, 2021] held that adjustment of Input Tax Credit ("ITC") with tax dues to be paid off by the assessee in 24 equal or nearly equal monthly installments on account of the orders passed in the pending appeals and on account of ITC, if any, against the last installment. Further held that, the assessee will also be liable to pay interest on reducing balance basis on the tax due component of the amount less any adjustment on account of appellate orders or ITC.

Facts:

This petition has been filed by JUD Cements Ltd. ("the Petitioner") for adjustment of ITC with tax dues to be paid by the Petitioner in installments amounting to INR 43,49,50,071/- as per the letter issued by the Revenue Department ("the Respondent"), that has been accepted by the Petitioner subject to the conclusion of the appeals, on account of the appeals pending for the period of 2017-18.

Held:

The Hon'ble Meghalaya High Court in WP (C) No. 344/2021 dated December 7, 2021 held as under:

• Held that, the entire amount of INR 43,49,50,071/- should be paid off by the Petitioner in 24 equal or nearly equal monthly installments beginning December 15, 2021 and payable by the 15^th day of the 23 succeeding months and the adjustment on account of the orders passed in the pending appeals and on account of ITC, if any, will be only against the last installment.

• Further held that, the balance amount then due will become automatically payable on default of payment of any installment by the Petitioner within the time permitted, and it will be open to the CGST authorities to proceed for realization in accordance with law.

• Stated that, the Petitioner would be liable to pay interest on reducing balance basis on the tax due component of the amount of INR 43,49,50,071/-, less any adjustment on account of appellate orders or ITC to be calculated after the completion of payment of last installment in terms of this order and the entire interest component will be payable within 60 days of the last scheduled date for payment of installments.

• Clarified that, the interest that is required to be paid and after the completion of the installments payment will be calculated on reducing balance basis in respect of the tax due component and not in any respect of the penalty or interest already added into the figure of INR 43,49,50,071/-. Further, the Petitioner will continue to pay the current GST dues without seeking any concession on account of the payment.

• Directed the Respondent, to annul the order cancelling the GST registration of the Petitioner and to restore the access the portal and all other facilities as in any normal case, upon the first installment payment made. Further clarified that, it will be open to the Respondent to cancel the registration within 15 days of any default in payment and deny access of the portal within 7 days of any such default, unless rectified before the relevant measure is taken.