Introduction: In the case of Neelachal Udyog Vs Joint Commissioner of State Tax (Appeal) before the Orissa High Court, the matter of non-constitution of the Second Appellate Tribunal (GSTAT) and the interim measure of depositing the entire tax demand was addressed. This landmark ruling holds critical implications for the state’s taxation framework and offers insights into the legal standing regarding appellate authority.
1. Background of the Case: The petitioner challenged the 1st appellate order, contending the non-liability to pay tax and penalty, especially in the absence of the 2nd appellate tribunal.
2. Court’s Decision: The court entertained the writ petition and as an interim measure, ordered the depositing of the entire tax demand within four weeks, while the rest of the demand stayed during the pendency.
3. Legal Implications: The decision emphasizes the lack of constitution of the GSTAT, the constraints on the court to condone delays in appealing, and the stipulations for depositing disputed tax amounts.
4. Practical Considerations: The case delineates the responsibilities of petitioners and appellate authorities, showcasing the complexity of managing legal procedures in the absence of essential legal structures.
Conclusion: The case of Neelachal Udyog Vs Joint Commissioner of State Tax in the Orissa High Court underscores the challenges faced in the judicial handling of tax disputes when there is an absence of necessary appellate forums. It illustrates the judicial intervention necessary to maintain legal order and points to the urgent need for constituting the required tribunals to streamline the appellate process. This ruling is likely to be a reference point for similar matters in the future, and sets a precedent for how legal mechanisms adapt to systemic gaps in the judicial process.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. This matter is taken up through hybrid mode.
2. The present writ petition is being entertained only because the Second Appellate Tribunal has not yet been constituted.
3. The petitioner has filed this writ petition challenging the 1st appellate order dated 23.06.2023 passed by the Joint Commissioner of State Tax (Appeal) CT & GST Territorial Range, Bhubaneswar, by which said authority has not admitted the appeal preferred by the petitioner, as the same is in contravention to sub-sections (1) & (4) of Section 107 of the GST Act and has rejected the appeal filed under sub-Section (1) of Section 107 of the Odisha Goods and Services Tax Act, 2017.
4. Learned counsel for the petitioner contended that the petitioner is not liable to pay the tax and penalty and, as such, against the order passed by the 1st appellate authority though second appeal lies, the 2nd appellate tribunal has not yet been constituted. It is contended that the petitioner has already deposited 10% of the demanded tax amount before the first appellate authority and as there is no second appellate forum, this Court should entertain this writ petition.
5. Diganta Dash, learned Addl. Standing Counsel vehemently contended that since there is delay in preferring the appeal, this Court may not be in a position to condone the delay beyond four months, particularly when appellate authority has not been vested with discretion to condone the delay beyond one month after lapse of three months from the date of communication of order impugned therewith. It is further contended that this case stands in different footing and, as such, the petitioner is liable to pay the tax. In the event the petitioner wants to avail the remedy by preferring appeal before the 2nd appellate tribunal then the petitioner is liable to pay 20% balance disputed tax for consideration of its appeal by the 2nd appellate tribunal.
6. Issue notice to the opposite parties.
7. Since Mr. Diganta Dash, learned Addl. Standing counsel for the Department accepts notice for the Opposite parties, let required number of copies of the writ petition be served on him within three working days. Reply be filed within two weeks and rejoinder thereto, if any, be filed before the next date.
8. Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition.
9. A. stands disposed of.
10. List this matter with W.P.(C) No.6684 of 2023 on the date fixed therein