Non-Constitution of GSTAT: Orissa HC Directs Payment of Entire Tax Demand

Biswal Sales Vs Commissioner of CT & GST (Orissa High Court)

Introduction: The Orissa High Court dealt with a writ petition challenging the 1st appellate order passed by the Joint Commissioner of State Tax (Appeal), Jajpur Range, Odisha. The petitioner, Biswal Sales, sought to appeal the order, but the 2nd appellate tribunal (GST Appellate Tribunal or GSTAT) had not been constituted yet. The issue revolved around the petitioner’s liability to pay tax and penalty and the absence of a functioning 2nd appellate forum.

Analysis: The petitioner’s counsel argued that the petitioner was not liable to pay the tax and penalty and, as there was no 2nd appellate tribunal established, the High Court should entertain the writ petition. The petitioner had already deposited 10% of the demanded tax amount before the 1st appellate authority.

On the other hand, the Standing Counsel for the Department contended that there was a delay in preferring the appeal, and the High Court might not condone the delay beyond four months. The petitioner was liable to pay the tax if it wanted to appeal before the 2nd appellate tribunal. However, since there was no 2nd appellate tribunal constituted, the petitioner needed to pay 20% of the balance disputed tax to have its appeal considered by the 2nd appellate tribunal.

Conclusion: The High Court issued notice to the opposite parties and accepted the Standing Counsel’s undertaking to represent them. As an interim measure, the Court ordered that the petitioner could avail the remedy by approaching the 2nd appellate tribunal, subject to depositing the entire tax demand within fifteen days. During the pendency of the writ petition, the rest of the demand would remain stayed. The Court disposed of the matter and listed it along with another related case for the next hearing.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

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 26.04.2023 passed by the Joint Commissioner of State Tax (Appeal), Jajpur Range, Jajpur, Odisha by which said authority has not admitted the appeal preferred by the petitioner, as the same is in contravention to sub­sections (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. N.K. Dash, 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 1^st appellate authority though second appeal lies, the 2^nd 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. Sunil Mishra, learned 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 2^nd appellate tribunal then the petitioner is liable to pay 20% balance disputed tax for consideration of its appeal by the 2^nd appellate tribunal.

6. Issue notice to the opposite parties.

7. Sunil Mishra, learned 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 2^nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days 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 along with W.P.(C) No.6684 of 2023 on the date fixed therein.