TaxTMI 
TaxTMI 
The story behind this case as reported in M/s. Magnum Estates Private Limited Versus Additional Commissioner, GST (Appeals) At: Central Excise & Customs Central Revenue Bhubaneswar, Superintendent CGST & Central Excise Balasore-1 Range Balasore, Superintendent Jajpur Audit Circle, GST & Central Excise Audit Commissionerate - 2026 (7) TMI 1043 - ORISSA HIGH COURT would not have come in public domain but for the in-depth analysis done by the division bench headed by the chief justice on 15/07/2026. The acts like this at the levels of superintendent itself is not acceptable as a quasi - judicial officer but the additional commissioner committed several errors which require to be noticed by minimum chairman of CBIC, if not the Finance Minister and the GST Council.
Error 1: It appears that OIA was passed by a very senior officer on 29/09/2025 in gross violation of Section 128A of the CGST act 2017, which was introduced by the finance act 2024 with effect from 01/11/2024. This section is categorical that when applicable taxes are paid pertaining to the specified financial years (2017-18 in the instant case) and the issue has not attained finality, no interest or penalty is leviable. This aspect has been deliberately overlooked by the additional commissioner (appeals) who rejected the OIO.
Error 2: The superintendent has violated the provisions of Section 73 which the additional commissioner even after noticing, closed his eyes as it was easier for him to reject the appeal. The issue involved is described in detail for better understanding.
The taxpayer has inadvertently availed excess ITC to the tune of 6,08,455. Even before the audit could detect this, a sum of 4,31,311 was reversed on October 2019 itself through GSTR 3B and the balance amount was duly paid on 15/01/2020, both voluntarily. The show cause notice got issued on 28/04/2023 and the submissions were not taken in to account and the OIO was passed confirming an interest amount of 1,87,093 and also penalty @ 10% of the ITC availed was also levied (60,845). When a show cause notice is issued under section 73 and where the taxes are paid before issuance of the SCN, there is no penalty. This is one violation. Interest is attracted under section 50 only if the ITC is utilized which fact has to be verified based on record. This exercise was also not done properly.
Error 3: it is a grave and glaring one. In the instant case, the main dispute was not on GST or ITC as the ineligible ITC was voluntarily reversed in full which facts are on record. The jurisdictional superintendent has for obvious reasons imposed interest as well as penalty with a sole objective of REVENUE targets. The over enthusiastic superintendent has mentioned the disputed interest amount wrongly with ulterior motives as TAX. This was done so as to attract applicable pre- deposit of 10 % plus 10% as his GST collections goes up. Even this error was endorsed by the additional commissioner by rejecting the appeal.
When the taxpayer went before the jurisdictional high court on writ, the junior departmental counsel vehemently argued in favor of Revenue by stating that GSTAT is functional and as they already gone on first appeal, they must go for second appeal for justice and this writ must be rejected.
The high court went in depth on this case and made several valid observations which are reproduced for ready reference. '6.9 If the petitioner is directed to avail remedy of appeal, then it would be mandatory requirement to deposit ten percent of 'interest' component which is wrongly affirmed in the Appeal as if it is forming part of 'Tax'. Learned Junior Standing Counsel has conceded to such submission.
6.10.Faced with such situation, this Court is, therefore, inclined to interfere with the Order-in-Appeal dated 29.09.2025 passed by the Additional Commissioner of GST (Appeal) in Appeal bearing No.391/BBSR- GST/APPEAL/2024. Under the above premises, the Order-in-Appeal dated 29.09.2025 passed by the Additional Commissioner of GST (Appeal) in Appeal bearing No.391/BBSR- GST/APPEAL/2024 is set aside and the matter is remitted to the Appellate Authority for deciding the appeal on merit afresh without being swayed away by earlier order and pass appropriate order in accordance with law after hearing the petitioner'.
Several benches of the GSTAT have already notified their functioning and as on 17/07/2026, more than 56,000 appeals have already been filed in the GSTAT portal. Despite this, there was a need for the high court to intervene by allowing the writ which speaks on the poor quality of adjudication as well as first appeal orders.
I appeal to the GST Council to take some steps on reduction of AVOIDABLE litigation as we can -not afford to have impermissible orders which are likely to be set aside or quashed later. For effective and efficient functioning of the GSTAT, the quality must improve in adjudication level itself and as and when there is a need either to set aside an order or to quash an order, cost must be imposed on the officer who has passed such order which is later set aside or quashed. This shall definitely allow the officer while adjudicating to be little bit reasonable. Either taxpayer must be permitted to file appeal directly before GSTAT against adjudication order itself by deleting the first appeal procedures or the Additional Commissioner (Appeals) or Commissioner (Appeals) as the case may be made as judicial authority as against the present system of quasi -judicial authorities by proper procedures.
This order of the Orissa High Court in the matter of M/s. Magnum Estates Private Limited Vs Additional Commissioner (Appeals) GST and two others requires wide publicity and hence part 2 shall also be there in the coming week on the same subject.