Smt. Sanghamitra Nanda Vs Central Board of Indirect Taxes and Customs (Orissa High Court)
Introduction: In a significant development, the Orissa High Court has stayed a Goods and Services Tax (GST) demand in the absence of the constitution of the Second Appellate Tribunal (GSTAT). The petitioner, Smt. Sanghamitra Nanda, challenged the 1st appellate order rejecting her appeal, citing contravention of GST Act provisions. The absence of a functional GSTAT prompted the court to entertain the writ petition, emphasizing the petitioner’s deposit of 10% of the demanded tax amount.
Detailed Analysis: Smt. Sanghamitra Nanda contested the 1st appellate order dated 15.09.2023, arguing that she is not liable to pay the tax and penalty. The 2nd appellate tribunal, GSTAT, crucial for pursuing further appeals, had not been constituted at the time. The petitioner had already deposited 10% of the demanded tax amount before the 1st appellate authority.
On the contrary, the Additional Standing Counsel for the Department, Mr. Diganta Dash, raised concerns about the delay in filing the appeal and urged the court not to condone it beyond four months. He emphasized that the petitioner would be liable to pay the tax if choosing to avail the remedy through the 2nd appellate tribunal, requiring a 20% balance disputed tax payment for appeal consideration.
The court, acknowledging the absence of a functioning 2nd appellate tribunal, granted an interim stay on the demand, subject to the petitioner depositing the entire tax demand within fifteen days.
Conclusion: The Orissa High Court’s decision to stay the GST demand due to the non-constitution of the Second Appellate Tribunal underscores the importance of providing taxpayers with a fair and accessible appellate process. The court’s emphasis on the petitioner’s compliance with a partial deposit requirement aligns with principles of procedural fairness. As the case progresses, it will be crucial to observe how the court addresses the concerns raised regarding the delay in filing the appeal and the petitioner’s liability to pay the tax in specific circumstances.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
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 15.09.2023 passed by the Joint Commissioner of State Tax (Appeal), Territorial Range, Ganjam, 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.
