Whether the taxpayer can approach the High Court to seek relief for payment of interest in installments?

No, the Honorable Madras High Court in Best Recharge v. Deputy Commissioner (ST) GST [W.P. (MD) NO. 9041 of 2024 and W.M.P (MD) NO. 8258 of 2024 dated 15.04.2024] directed the assessee to approach the Commissioner under section 80 of the Central Goods and Services Tax Act, 2017 to seek relief for payment of interest in monthly installments pertaining to disputed tax already discharged on account of excees/ wrong availment of Input Tax Credit. The Honorable Madras High Court observed that the order passed by the first appellate authority does not require any interference as the order does not suffer from any of the vices that require it to be reviewed under Article 226 of the Constitution of India. The Honorable Court noted that since the Petitioner has paid the disputed tax, the only relief the Petitioner is seeking for payment of interest in installments for which the Petitioner has to approach the Commissioner under Section 80 of the CGST Act.

Author’s Comments:

Pertinent to mention that as per the amendment vide Section 116 of the Finance Act, 2022, the rate of interest has been reduced from 24% to 18% of the ITC wrongly availed and utilized, from the retrospective date 01.07.2017. Now the interest can levied at the rate of 18% on ITC wrongly claimed & utilized, subject to provisions of Rule 88B which is currently being overlooked by the administration.

Interestingly, the construct of section 73(1) does not permit recovery of only demand for interest (or penalty) without a primarily demand for tax (or credit or refund). Similar was the construct of section 11A of the Central Excise Act or section 73(1) of the Finance Act where the ‘deposit-demand appropriation’ approach has been upheld, the same would apply to GST, and any other approach to demand ‘only interest’ would be fatal in GST.

Further, as per Section 80 of the CGST Act, on an application preferred by a taxable person, the Commissioner may, for the reasons to be recorded in writing, extend the time for payment or allow payment of any dues in installments not exceeding 24 months. However, in case of default by the taxpayer in payment of any one installment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and shall, without any further notice being served on the person, be liable for recovery.