Case Law Details
Paradeep Phosphates Ltd. Vs Odisha Sales Tax Tribunal (Orissa High Court)
The Orissa High Court disposed of a writ petition challenging two interlocutory orders of the Odisha Sales Tax Tribunal (OSTT). The petitioner questioned the Tribunal’s refusal to adjudicate the jurisdictional challenge to an assessment framed under Section 10 of the Odisha Entry Tax Act, 1999 (OET Act) during the pendency of proceedings concerning exemption under a scheme approved by the erstwhile Board for Industrial and Financial Reconstruction (BIFR). The petitioner also challenged the Tribunal’s subsequent refusal to recall the interlocutory order on the ground that it lacked the power of review.
The petitioner had been assessed to entry tax under Section 10 of the OET Act. Although the first appellate authority set aside the assessment and directed a fresh assessment, the petitioner filed a second appeal before the OSTT. During the hearing, the petitioner raised an additional ground challenging the jurisdiction of the assessing authority to invoke Section 10. The Tribunal, however, deferred consideration of that issue until the proceedings before the NCLAT concerning the petitioner’s entitlement to entry tax exemption under the BIFR-approved scheme were decided.
The petitioner submitted that the BIFR had sanctioned a scheme granting exemption from entry tax for a specified period and that the subsequent denial of the benefit by the State authorities led to further proceedings before the BIFR, which were later transferred to the NCLT following repeal of the Sick Industrial Companies (Special Provisions) Act, 1985. After the NCLT declined relief, the matter was carried in appeal before the NCLAT. According to the petitioner, the issue of exemption related to the merits of the tax demand, whereas the jurisdiction of the assessing authority under Section 10 constituted a preliminary issue that ought to have been independently decided by the OSTT. The petitioner relied on earlier judicial precedents to contend that the Tribunal should have adjudicated the jurisdictional challenge instead of postponing it pending the NCLAT proceedings.
The Revenue contended that the challenge to the interlocutory orders no longer survived since the NCLAT had disposed of the appeal by judgment dated 18 May 2026. It submitted that the OSTT had deferred hearing to avoid deciding the second appeal piecemeal and could now proceed with the appeal on merits after the NCLAT decision.
The High Court noted that the NCLAT proceedings, which the OSTT had awaited, had already concluded. It held that the interests of justice would be served by directing the OSTT, being the final fact-finding authority empowered to decide both questions of law and fact, to hear and dispose of the second appeal by considering all grounds raised by the petitioner, including the jurisdictional challenge to the assessment under Section 10 of the OET Act. The Court expressly left all questions open for adjudication before the Tribunal and clarified that it had expressed no opinion on the merits of the controversy. The OSTT was directed to fix the second appeal for hearing and decide it on the basis of the grounds and materials available on record, including the jurisdictional issue and other questions of law. With these directions, the writ petition and pending interlocutory applications were disposed of without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. An Interlocutory order dated 11th February, 2026 vide Annexure-1 in connection with second appeal bearing SA No.147 (ET) of 2018 passed by the learned Full Bench of the Odisha Sales Tax Tribunal, Cuttack (“OSTT”, for brevity) refusing to adjudicate jurisdictional issue raised qua assessment framed under Section 10 of the Odisha Entry Tax Act, 1999 (“OET Act”, for short) during the pendency of consideration of claim for benefit of exemption by the learned National Company Law Appellate Tribunal (NCLAT) is assailed in this writ petition.
1.1. Challenge is also made to an order dated 12th March, 2026 rejecting petition filed by the petitioner to recall said interlocutory order on the ground of lack of jurisdiction to exercise power of review and, thereby refusing to recall the aforesaid order dated 11th February, 2026 vide Annexure-2.
2. From the facts adumbrated in the pleadings and undisputed by the opponents, it would transpire that the petitioner was assessed to entry tax under Section 10 of the OET Act by the Deputy Commissioner of Sales Tax, Jagatsinghpur Circle, Paradeep, vide order dated 6th January, 2014 which was set aside by the Additional Commissioner of Sales Tax (Appeal) vide order dated 18th September, 2018 in the first appeal preferred under Section 16 of said Act with a direction to undertake assessment afresh.
Aggrieved thereby, invoking Section 17 of the said Act the petitioner carried the matter before the learned OSTT in second appeal, being registered as SA No.147(ET) of 2018.
3. Learned counsel appearing for the petitioner submitted that in course of final hearing of second appeal, the petitioner laid emphasis referring to the additional ground with respect to jurisdiction of assessing authority in undertaking assessment under Section 10. The learned OSTT instead of addressing such issue being preliminary and seminal, observed not proceed with the adjudication till the matter before the National Company Law Appellate Tribunal qua ‘eligibility’ and/or entitlement of ‘exemption’ in terms of scheme approved by the erstwhile Board for Industrial and Financial Reconstruction (abbreviated as, “BIFR”) is decided.
3.1. Expanding his argument further, the learned counsel for the petitioner submitted that the petitioner approached the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, “the SICA”) for grant of relief and a scheme was approved entitling it to claim exemption from payment of entry tax for a period of 7 years, i.e., from 31st of March, 2007 till 31st of March, 2014.
3.2. Under an impression that the Government would grant such benefit, the petitioner-company filed Misc. Application before BIFR for de-registration as a sequel to the net worth of the company having turned positive as per the audited balance sheet: 31.03.2011. The BIFR passed an order to the effect that “the company M/s. Paradeep Phosphates Ltd. (PPL) has ceased to be a ‘sick industrial undertaking’ within the meaning of Section 3(1)(0) of the Act”.
3.3. The State Government in Finance Department as well as the Commissioner of Sales Tax instead of complying with the terms of the Scheme sanctioned by said BIFR denied such exemption. Therefore, the petitioner had to approach the BIFR on 18.06.2014 by filing a petition, registered as Miscellaneous Application No. 285 of 2014.
3.4. During the pendency of the matter before the BIFR, the assessment order dated 06.01.2014 under Section 10 of the OET Act was passed. Despite pendency of matter before the BIFR being brought to the notice of the appellate authority under Section 16 of the OET Act, the appeal was disposed of by setting aside the assessment.
3.5. Upon repeal of the SICA, the matter was transferred to National Company Law Tribunal (be referred to as “NCLT”) in view of introduction of the Insolvency and Bankruptcy Code, 2016. The NCLT having turned down to entertain such a plea of the petitioner, an appeal was preferred before the learned National Company Law Appellate Tribunal (be referred to as “NCLAT” for convenience).
3.6. Learned Advocate vehemently contended that the entitlement or eligibility of claim for exemption from payment of entry tax in terms of Scheme sanctioned by the BIFR is matter of merits having bearing on the demand raised in the assessment. Though such ground is subject matter for consideration on merit of demand by the learned OSTT, the principal ground (Ground No.B of the memorandum of second appeal), viz., jurisdiction of the assessing authority to invoke provisions of Section 10 of the OET Act on the facts and in the circumstances, ought to have been considered.
3.7. It is submitted that despite the appellate authority having taken note of the fact that the claim for exemption from payment of entry tax was sub judice before the NCLT at the relevant point of time having set aside the order in reassessment for fresh assessment, the petitioner approached the learned OSTT as the said appellate authority failed to appreciate issue regarding exercise of power under Section 10 of the OET Act by the assessing authority. As the issue of jurisdiction goes to the root of the matter, the learned OSTT should have given due weightage for such a plea particularly in view of decision rendered by the Full Bench of this Court.
3.8. Relying on the law laid down in ECMAS Resins Pvt. Ltd. Vs. State of Odisha, (2023) 112 GSTR 333 (Ori), which was not interfered with by the Hon’ble Supreme Court in the appeal sought to be preferred by the State of Odisha, vide, Deputy Commissioner of Sales Tax Vs. Rathi Steels and Power Limited, (2023) 112 GSTR 331 (SC), it is submitted by the learned Senior Counsel that the learned OSTT should have addressed the issues raised by the petitioner and concluded the second appeal itself.
3.9. It is submitted that the learned OSTT having heard the matter at length should have decided the issue of authority of the Deputy Commissioner of the Sales Tax to proceed with the reassessment under Section 10 and should not have deferred the hearing awaiting decision by the learned NCLAT.
It is submitted that the OSTT should have disposed of the second appeal by addressing the issues based on material available on record.
Hence, learned Senior Advocate seeks intervention as the learned OSTT under a mistaken perception observed thus:
“The fundamental issue of jurisdiction of assessment to invoke reassessment under Section 10 of the OET Act is a question to be decided by this Tribunal and in the event of such question is decided pending the appeal before the NCLAT, we are of the considered opinion that it will render the issues before the NCLAT otiose and is also beyond the judicial discipline.”
3.10. It is further submitted that the petitioner prayed before the learned OSTT to recall the interlocutory order No.48, dated 11th February, 2026 by way of an application, but in vain. By order No.49, dated 12.03.2026, said OSTT refused to recall the order and placed the second appeal for final hearing.
4. Per contra, Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organisation-opposite parties submitted that the cause of action challenging the orders dated 11th February, 2026 and 12th March, 2026 (Annexures-1 and 2 respectively) does not survive in view of the Judgment dated 18th May, 2026 in Company Appeal (AT) (Insolvency) No.193 of 2023 rendered by the learned NCLAT disposing of the appeal, as enclosed to the I.A. No.10414 of 2026 filed by the petitioner.
4.1. Learned Standing Counsel for Revenue thus submitted that in order to dispose of second appeal, the learned OSTT awaited for the result of appeal preferred by the petitioner before the NCLAT qua exemption from payment of entry tax. It is submitted that instead of deciding the second appeal piecemeal, the learned OSTT has thought it prudent to address each of the grounds agitated by the petitioner.
It is submitted now since the learned NCLAT has disposed of the appeal of the petitioner-company under the SICA/IBC, the learned OSTT can take up the second appeal for final hearing on merits.
5. We have gone through the records and heard Mr.Ashish Kumar Samal, learned Advocate and Mr.Sunil Mishra, learned Standing Counsel.
6. It is found from the document enclosed to I.A. No.10414 of 2026 that the pending case before NCLAT, awaited by the OSTT, has been disposed of by Judgment dated 18.05.2026.
In considered view of this Court interest of justice would be best sub-served if a direction is issued by this Court for taking up the second appeal by the OSTT for hearing and disposal by considering all the grounds agitated by the petitioner. The question as posed by the petitioner is left open for adjudication in appropriate proceeding.
7. In view of the discussions made in the foregoing paragraphs, it would be apt to direct the learned Odisha Sales Tax Tribunal, being final fact-finding authority and vested with power to adjudicate both questions of law as well as facts, to expedite hearing of the second appeal on merits as well as on the question of jurisdiction of the assessing authority.
7.1. It is further observed that no part of this shall be treated to be expression of opinion of this Court on merits of the contentions of the parties to the second appeal before the learned OSTT. This Court has not expressed any view on the merit of the second appeal to be adjudicated by the learned Odisha Sales Tax Tribunal.
7.2. The learned Odisha Sales Tax Tribunal shall fix a date of hearing of second appeal being SA No.147(ET) of 2018 and may decide the second appeal by taking into consideration the grounds and the materials available on record including the jurisdictional issue and questions of law that would arise for consideration.
8. With the aforesaid observation and direction, the writ petition along with pending Interlocutory Application(s), if any, stands disposed of. No costs.
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