Payment of Tax, interest and penalty in 48 monthly installments –— The petitioner due to loss in business could not pay the required GST dues to the department on time. As the required tax amount had not been paid, his registration was cancelled. The petitioner submitted that they are willing 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 forty eight installments. The Petitioner relied upon the Circular No. 996/3/2015-CX dated 28.02.2015. The court observed that because the precarious financial condition, the petitioner could not pay the entire amount due plus the interest and penalty within 36 installments, which is the maximum limit for the Chief commissioner sought payment of dues in 48 installments. When it is statutorily provided that the maximum permissible installments be 36, the Court ought not to randomly extend such installments beyond this but at the same time, if further installments are not allowed, they would be unable to pay the tax due and it may result in a sustenance of the order of cancellation of their registration.

Held that:- The Hon’ble High Court provided that the amount of assessed tax due plus the interest and the penalty be equally divided by 48 and the monthly amount payable by the petitioner firm be determined and communicated to him. Upon such determination the petitioner firm shall pay the determined monthly installments within the 7th of every month. If the petitioner firm do not comply with the requirement of paying the determined monthly installment, and in the event of default, the earlier order of cancellation may be revived by the department without any further reference. The order of cancellation of the registration would have no effect, subject to any default if made by petitioner.