The Madras High Court has permitted a contractor to pay the outstanding State GST (SGST) dues in three monthly installments after noting that the taxpayer had already discharged the entire Central GST (CGST) component, including tax, interest, and penalty.
The bench of Justice Senthilkumar Ramamoorthy exercised its equitable jurisdiction while observing that the taxpayer had admitted the tax liability and, therefore, could not seek installment relief under the statutory provisions of the GST law.
The writ petition was filed challenging an assessment order dated 25 October 2023 and a subsequent rectification order dated 3 May 2024 passed by the Assistant Commissioner (ST), Mettupalayam Taluk Assessment Circle, Coimbatore, in relation to the tax period 2020-21. The petitioner sought quashing of both orders before the High Court.
During the hearing, the petitioner informed the Court that the entire CGST liability, including tax, interest, and penalty, had already been paid on 13 May 2025. However, the petitioner requested approximately three months’ time to clear the corresponding SGST dues.
The State Tax Department opposed the plea and submitted that the payment already made by the petitioner was voluntary in nature. The Government Counsel argued that the taxpayer had effectively accepted the liability and that the entire demand should therefore be treated as undisputed.
The bench noted that the documents on record clearly demonstrated that the petitioner had admitted the tax liability. Consequently, the Court observed that the petitioner could not seek instalment payment benefits under Section 80 of the applicable GST enactments, which governs payment of tax dues in installments.
The Court, however, recognised that the petitioner had already discharged the CGST portion of the liability and was seeking equitable relief solely with respect to the SGST component. Taking this circumstance into consideration, the Court found it appropriate to grant limited relief by allowing the remaining dues to be paid in installments.
Disposing of the writ petition, the High Court directed that the outstanding SGST-related tax, interest, and penalty may be paid in three monthly installments. The first instalment must be paid on or before 15 July 2026, while the remaining two instalments must be paid on or before the sixth day of each succeeding month.
The Court further clarified that if the petitioner defaults in complying with the instalment schedule, the tax authorities would be free to initiate recovery proceedings in accordance with law.
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