Indera Motors Vs Commissioner of Commercial Taxes (Orissa High Court)
The Orissa High Court addressed a petition filed by Indera Motors challenging a demand for 9% interest on entry tax from the date of filing the return. This demand was issued by the Joint Commissioner of Sales Tax, CT & GST Circle, Rourkela II. The case has a history of litigation concerning the Orissa Entry Tax Act, 1999. Initially, the High Court ruled in favor of the assesses, upholding the Act’s validity. Subsequently, the Supreme Court, in an interim order, directed assessee to pay one-third of the demand, keeping the rest in abeyance. The Supreme Court later upheld the Act’s validity in its final decision on March 28, 2017.
Despite the Supreme Court’s judgment, further litigation arose in the Orissa High Court regarding the imposition of interest for the period between the filing of returns and the Supreme Court’s decision. Indera Motors was part of a batch of writ petitions disposed of on March 15, 2023, where the High Court directed payment of the remaining two-thirds of the demand with interest from the Supreme Court’s order date, and compensatory interest at 9% for the earlier period. The matter is now pending before the Supreme Court following appeals by both the department and some assessee, with an interim order of no coercive action against petitioners who approached the Apex Court. Indera Motors argued that this interim relief should apply to all assesses. However, the Orissa High Court clarified that the Supreme Court’s interim order specifically applies only to those who filed the Special Leave Petition (SLP) and not to all assesses. Since Indera Motors did not challenge the High Court’s 2023 order before the Supreme Court, it cannot claim the benefit of that interim relief. The High Court, however, granted Indera Motors two months to deposit the demanded interest, without prejudice to the rights and contentions of both parties, acknowledging the confusion among assesses regarding the interim order’s applicability.
