Niranjan Das Vs Poonam Choudhury & Ors. (GSTAT Cuttack)
Summary: M/s Niranjan Das, a works contractor executing construction works for different government departments and public authorities, filed an interlocutory application arising out of an appeal filed vide ARN 2026121101000327 dated 07.06.2026. The interim application sought relief against recovery measures initiated by the respondent during pendency of the appeal before the Goods and Services Tax Appellate Tribunal. The appellant stated that the GST liabilities for the year 2018-19 had been fully discharged before initiation of proceedings under the GST Act. Despite that stated full discharge, and despite the appellant’s assertion that there had been no fraud or wilful suppression or misstatement of material facts with intent to evade tax, proceedings under section 74 of the OGST Act were initiated and demand towards penalty and interest was confirmed. The appellant preferred an appeal under section 107 of the OGST Act, but that appeal was rejected on limitation without considering the substantive grounds, including the sustainability of the penalty imposed under section 74. The appellant thereafter filed an appeal before the Tribunal under section 112(1) of the OGST Act. While that appeal remained pending, recovery proceedings were initiated by issuing a recovery notice to the works authorities from whom amounts were receivable by the appellant. The appellant submitted that the coercive recovery action would cause severe prejudice and irreparable injury by disrupting the ongoing works-contract business and would defeat the purpose of the appeal, particularly when the revenue interest was safeguarded by full discharge of the tax liabilities. The appellant therefore sought a direction to withdraw the recovery notice issued to the works authorities. The respondent was given an opportunity to verify the appellant’s assertion regarding full discharge of GST liabilities. After obtaining instructions, the respondent’s counsel confirmed full discharge of GST liabilities and did not contest the appellant’s prayer for interim stay of recovery during pendency of the appeal. The Tribunal noted that the appeal before it was still under scrutiny and had not yet been admitted, and therefore considered it premature at that stage to examine the substantive challenge to the invocation of section 74 and confirmation of the demand. It further noted that the appeal under section 107 had been rejected on limitation and that the substantive issues consequently must not have been examined in the order in appeal. At the same time, the Tribunal recorded that, despite the appeal under section 112(1) of the OGST Act and the statutory protection under section 112(9) of the OGST Act, recovery had been initiated against the source of payment of consideration receivable for works-contract services. Since the respondent had confirmed that the appellant had discharged the full tax liability, the Tribunal observed that there did not appear to be any possibility of non-compliance with the requirement of section 112(8) of the OGST Act. In those circumstances, the Tribunal found that allowing recovery to continue could defeat the purpose of the appeal and cause irreparable damage by destabilising the appellant’s ongoing business. Exercising the power referred to under section 113 of the OGST Act read with Rule 29 of the GSTAT (Procedure) Rules, 2025, the Tribunal directed that operation of the order passed under section 107 rejecting the appeal should remain stayed until disposal of the appeal before the Tribunal and directed the respondent or any other officer to desist from pursuing recovery of the disputed demand until disposal of the appeal.
