The Madras High Court ruled that the object of Section 80 is only to benefit an assessee who has been complaint in effecting payment of the admitted tax.
Facts
The petitioner is a Company and an assessee to State Value Added Tax under the provisions of the Tamil Nadu Goods and Services Tax Act, 2017. Admittedly, it did not file returns in Form – GSTR-3B for the period September, 2018 – March, 2019.
There was an inspection in the premises of the Petitioner on 11.03.2019 when several discrepancies were noted. The petitioner has unequivocally admitted to those discrepancies even at the time of inspection as revealed from communication wherein it accedes to the position that there has been non-payment of GST for the period in question.
Their explanation was to the effect that the Company had incurred loss on account of the fall in the prices of imported coal and that it was holding huge stock and was compelled to sell the same at unviable prices to avoid demurrage, interest and other dues to the port at Krishnapatanam.
They conclude with a plea for mercy assuring the respondents that they would remit the amounts due in 24 instalments along with interest. This request has come to be rejected on 31.10.2019 by the Commissioner holding that the facility of grant of instalments under Section 80 is only in respect of disputed tax and not admitted tax.
Submissions
The petitioner argued that the form GSTR I does not comprise a return and thus the exclusion that is set out under Section 80 would not apply to it.
Counsel for the petitioner stated that the order under Section 80 has been passed even prior to the assessment having been framed under Section 73.
Decision
The single judge bench of Justice Anita Sumanth said that the return of outward supplies is in form GSTR 1 and is the return that has been filed by the petitioner. Thus, the argument that GSTR 1 only deals with ‘details’ and hence would not constitute a statutory return is unacceptable and contrary to the scheme of the Act.
The bench observed that Section 80 makes no reference to an assessment at all. It only talks of turnover that has been self-assessed. In this case, the petitioner has filed the prescribed form setting forth the details of the outward supplies and the question of assessment does not arise. Incidentally, an assessment has also been made proximate to the proceedings for inspection when also the petitioner has acceded to the position that there has been suppression of sales.
The court held that while the petitioner has filed returns it has not paid the tax and hence it is barred from obtaining benefit under Section 80.
Case title: M/s.K.I.International (India) Ltd. v/s The Principal Secretary / Commissioner of Commercial Taxes
Citation: W.P.No.10379 of 2020 and W.M.P.No.12624 of 2020
