Orissa HC Stays GST Demand Due to Non-Constitution of Second Appellate Authority

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

Introduction: The Orissa High Court has issued a stay order on the demand of Goods and Services Tax (GST) in a case where the Second Appellate Tribunal has not been constituted. The petitioner has challenged the 1st appellate order and seeks relief from the court.

Analysis: The petitioner filed a writ petition challenging the 1st appellate order, which was passed by the Joint Commissioner, State Tax (Appeal), Territorial Range, Koraput. The appeal was rejected by the authority, citing contravention to specific sections of the GST Act. However, the petitioner claims that they are not liable to pay the tax and penalty.

The crux of the issue is that the Second Appellate Tribunal, the next forum for appeal, has not yet been constituted. Due to this delay, the petitioner urges the High Court to entertain the writ petition as there is no other avenue for redressal.

The Standing Counsel for Revenue, on the other hand, argues against condoning the delay in preferring the appeal beyond four months. They also contend that the petitioner is liable to pay the tax and penalty. However, they suggest that the petitioner can avail the remedy by filing an appeal before the yet-to-be-constituted Second Appellate Tribunal, subject to the payment of 20% balance disputed tax.

Conclusion: The Orissa High Court has issued notice to the opposite parties and accepted the Standing Counsel’s notice on their behalf. As an interim measure, the court stays the rest of the tax demand during the pendency of the writ petition, provided the petitioner deposits the entire tax demand within four weeks. The court will further consider the matter along with another case on the date fixed therein.

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 24.05.2023 passed by the Joint Commissioner, State Tax (Appeal), Territorial Range, Koraput 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. R.C. Jena, 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 for Revenue 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 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 the 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 along with W.P.(C) No.6684 of 2023 on the date fixed therein.