Case Law Details
Tapas Kumar Mohanty Vs Central Board of Indirect Taxes (Orissa High Court)
Introduction: The Orissa High Court has intervened in a matter concerning a Goods and Services Tax (GST) demand due to the non-constitution of the Second Appellate Tribunal. The petitioner challenged an appellate order passed by the Addl. Commissioner of State Tax (Appeal) on the grounds that they are not liable to pay the tax and penalty. As the Second Appellate Tribunal has not yet been constituted, the High Court stayed the GST demand, allowing the petitioner to seek relief through the court.
Background: The petitioner filed a writ petition to challenge an appellate order dated 08.09.2023 passed by the Addl. Commissioner of State Tax (Appeal). The 1st appellate authority did not admit the petitioner’s appeal, citing violations of specific sub-sections of Section 107 of the GST Act. As a result, the appeal under sub-Section (1) of Section 107 of the Odisha Goods and Services Tax Act, 2017 was rejected.
Non-Constitution of Second Appellate Tribunal: The petitioner’s contention is rooted in the absence of the Second Appellate Tribunal, which is the next appellate forum for GST matters. The delay in preferring the appeal has raised concerns, and the court may not be able to condone the delay beyond four months, especially since the appellate authority has limited discretion to condone delays. The petitioner has deposited 10% of the demanded tax amount before the first appellate authority.
Government’s Stand: The government’s stance is that there is a delay in filing the appeal, and the court may not condone it beyond four months. Furthermore, the petitioner is deemed liable to pay the tax, and if they wish to appeal before the Second Appellate Tribunal, they must pay 20% of the balance disputed tax for the appeal to be considered.
Court’s Decision: The Orissa High Court issued notices to the opposite parties and accepted their responses. The petitioner’s request to approach the Second Appellate Tribunal, which has not been constituted, was acknowledged. As an interim measure, the court stayed the rest of the tax demand, provided the petitioner deposits the entire tax demand within fifteen days.
Conclusion: The Orissa High Court’s intervention in this case highlights the challenges faced by taxpayers when the necessary appellate forums are not available. The stay on the GST demand serves as temporary relief for the petitioner, pending the constitution of the Second Appellate Tribunal. This case underscores the importance of having functioning appellate mechanisms in place for efficient dispute resolution in tax matters.
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 08.09.2023 passed by the Addl. Commissioner of State Tax (Appeal), South Zone, Berhampur 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. Mr. Diganta Dash, learned Additional 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. Mr. Diganta Dash, learned Additional Standing Counsel for the Department accepts notice for Opposite party nos. 2 to 4 and Mr. Avinash Kedia, learned Junior Standing Counsel accepts notice on behalf of Opposite Party No.1, let required number of copies of the writ petition be served on them 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 fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.
9. I.A. stands disposed of.
10. List this matter along with W.P.(C) No.6684 of 2023 on the date fixed therein.
