Orissa HC stays Penalty and Interest Demanded by GST Department in absence of Second Appellate GST Tribunal [Read Order]

A Division Bench of the Orissa High Court stayed the penalty and interest demanded by the Goods and Service Tax (GST) Department in absence of Second Appellate Goods and Service Tax (GST) Tribunal.

The petitioner, Prafulla Kumar Sahoo has filed the writ petition challenging the first appellate order passed by the Joint Commissioner of State Tax (Appeal), 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.

The 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 first appellate authority though second appeal lies, the 2nd appellate tribunal has not yet been constituted. It was also 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, the present writ Court should entertain this writ petition.

Standing Counsel vehemently contended that since there is delay in preferring the appeal, the present writ 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 was 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 second appellate tribunal then the petitioner is liable to pay 20% balance disputed tax for consideration of its appeal by the second appellate tribunal.

The Court of Justices Dr BR Sarangi and MS Raman observed that “Since the petitioner wants to avail the remedy under the provisions of law by approaching second appellate tribunal, which has not yet been constituted, the amount of penalty and interest demanded by authority shall remain stayed during pendency of the writ petition subject to the Petitioner depositing the entire amount of tax demanded within a period of fifteen days from today.”

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates