HC grants SpiceJet relief against recovery proceedings by GST authorities

Business Standard HC grants SpiceJet relief against recovery proceedings by GST authorities

Low-cost airline SpiceJet has been granted relief from the Punjab and Haryana High Court which has asked the GST department to consider and pass an order on the airline’s plea of paying the tax dues in instalments.

GST authorities issued a notice in late July, asking SpiceJet to pay tax liabilities of Rs 80.6 crore and furnish details of movable and immovable properties, warning that they would initiate recovery proceedings if the payment was not made.

SpiceJet did not dispute the tax liability in its petition. The company, however, opposed any recovery proceedings and requested the tax authorities to allow it to pay the dues in 24 instalments, instead of a single payment.

“Having heard the learned counsel appearing for both the parties, we find the prayer of learned senior counsel for the petitioner to be a fair one. Consequently, we dispose of this writ petition with a direction to the Excise and Taxation Commissioner of State Tax, Haryana to decide the representation by passing a speaking order within a period of two weeks from the date of receipt of certified copy of this order,” the court said in its order.

“Since the tax liabilities were never opposed by SpiceJet and it had requested the authorities to pay in instalments due to the unprecedented hit to business because of Covid19. Since the dues were never opposed by the company and instead more time was sought, to clear the dues, a writ petition was filed opposing recovery proceedings. The court has recognised this and has asked the tax authorities to decide on the company’s request,” said advocate Anuj Dewan, who represented SpiceJet in the case.

The excise and taxation department of Haryana on July 27 sent a show cause notice to SpiceJet saying that the company hadn’t paid tax dues of Rs 80.6 crore which included the period of FY20, FY21 and FY22 (April-June). The department said if the dues were not cleared by 4 August, it would start recovery proceedings against the company.

SpiceJet responded to the show cause notice saying that since the company was facing an acute cash crunch due to the adverse impact of the first and second wave of Covid-19, it be allowed to pay the tax liabilities in 24 equal monthly instalments.

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