Orissa HC Reduces Pre-Deposit for GST Appeal Stay to 10%

Jagajyoti Mahanta Vs Commissioner of CT and GST (Orissa High Court)

In the case of Jagajyoti Mahanta Vs Commissioner of CT and GST, the Orissa High Court addressed a matter concerning the pre-deposit requirement for staying a demand in a tax appeal. The petitioner, Jagajyoti Mahanta, challenged the order passed by the First Appellate Authority on November 20, 2023. The petitioner sought to file an appeal before the Tribunal, but due to the non-constitution of the Tribunal, the case was brought before the High Court for resolution. The petition was filed in line with earlier directions issued by the Court in February 2024 concerning similar tax disputes.

In the prior judgment, the Court had directed that assessees must deposit 10% of the disputed tax amount when filing an appeal, with an additional 20% deposit required for the stay of the impugned order. However, a recent notification issued by the Central Government on August 16, 2024, reduced the pre-deposit requirement to 10% for the stay of demand. Following this, the State Revenue Department issued a corresponding notification on October 29, 2024, aligning with the revised policy.

The petitioner sought the modification of the pre-deposit requirement in line with these updated notifications. It was argued that the deposit of 10% of the disputed tax amount, as per the new government guidelines, should suffice for the stay of the impugned order. The Court considered the petitioner’s submission and the latest notifications issued by both the Central and State governments.

Upon reviewing the case, the Orissa High Court agreed with the petitioner’s request and accepted the revised pre-deposit condition. The Court modified the earlier requirement, ordering that the petitioner would only need to deposit 10% of the disputed tax for the impugned order to remain stayed. The writ petition was subsequently disposed of, with the pre-deposit condition modified accordingly.

This decision reflects the Court’s adherence to the updated government guidelines on pre-deposit and demonstrates a flexible approach to the changing norms in tax dispute procedures. By aligning with the government’s notifications, the Court ensured a consistent and fair approach to the petitioner’s case.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. Mr. Mahanta, learned advocate appears on behalf of petitioner and submits, his client is aggrieved by order dated 20^th November, 2023 made by the First Appellate Authority. He wants to appeal therefrom to the Tribunal but it has not yet been constituted. In the circumstances assessees and the department were complying with directions made on order dated 16^th February, 2024 by the First Division Bench in a batch of writ petitions, lead case being WP(C) no.42015 of 2023 (M/s. Maa Tarini Traders v. State of Odisha and others).

2. The directions included requiring the assessee to deposit 10% of the disputed amount of tax on filing the appeal and further 20% of remaining disputed tax, for the impugned order to be stayed.

3. He submits, his client is up against State revenue. There was notification dated 16^th August, 2024 made by Central revenue reducing latter deposit to 10%. Now, State revenue has correspondingly notified on 29^th October, 2024. In the circumstances, the writ petition be disposed of as covered by order dated 16^th February, 2024 (supra) with modification for deposit of 10% of remaining disputed tax for impugned order to remain stayed.

4. Mr. Das, learned advocate, Additional Standing Counsel appears on behalf of State revenue.

5. We accept submission made on behalf of petitioner regarding corresponding notification reducing requirement of the deposit to 10% of disputed tax for impugned first appellate order to remain stayed. The deposit be made accordingly.

6. The writ petition is accordingly disposed of.