The Madras High Court has ruled in favour of a manufacturing company facing financial difficulties, allowing it to clear its pre-GST ( Goods and Services Tax ) dues of Rs. 1.2 crores through monthly instalments. However, the court also instructed the department to take legal actions against the company if it fails to clear the dues within 12 months.  In the writ petition, the company Ohm Srinivasa Paper Boards challenged an order that created a demand for tax arrears under Form GST DRC-07A, concerning tax liabilities from February 2015 to June 2017 under the Central Excise Act, 1944.

The demand was based on the company’s self-assessment under the Central Excise Rules, 2002. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here Previously, the petitioner attempted to resolve its tax disputes through the Sabka Vishwas ( Legacy Disputes Resolution ) Scheme, 2019, but failed to pay the admitted liabilities necessary to benefit from the scheme. The total amount due from the company, including tax, interest, and penalty, was ₹1,46,79,069.

It had made a partial payment of ₹25,00,000, leaving an outstanding balance of ₹1,21,79,069. Considering the company’s ongoing losses and inability to meet its tax obligations under the old regime, the court acknowledged the absence of disputes other than the outstanding amount owed. Justice C. Saravanan decided to exercise its discretion in favour of the petitioner, allowing the company to pay the remaining balance in 12 equal monthly instalments, beginning August 1, 2024, and concluding July 1, 2025.

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here The court also warned that if the company fails to comply with this payment plan, the authorities are authorised to take legal action, which may include attaching the company’s properties for recovery. To Read the full text of the Order CLICK HERE