GST Tax Assessment Challenged: Partial Relief Granted with 10% Tax Deposit and Penalty Stay Pending Further Review

The HC partially allowed the writ petition challenging a GST tax assessment. The court stayed penalty and interest, directing the petitioner to deposit 10% of disputed tax within two weeks. The court issued notice to respondents and listed the matter for further proceedings, addressing procedural challenges related to appellate tribunal constitution and delay in filing appeals.

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Issues involved:
The issues involved in the judgment are the challenge to the 1st appellate order under the GST Act, delay in preferring the appeal, constitution of the 2nd appellate tribunal, liability to pay tax and penalty, and the stay of penalty and interest amount.

Challenge to 1st Appellate Order:
The petitioner filed a writ petition challenging the 1st appellate order dated 24.02.2023 passed by the Joint Commissioner of State Tax (Appeal), Cuttack, which rejected the appeal under subsections (1) & (4) of Section 107 of the GST Act. The petitioner contended that they are not liable to pay the tax and penalty, and due to the absence of the 2nd appellate tribunal, this Court should entertain the writ petition.

Delay in Preferring the Appeal:
The Addl. Standing Counsel argued that there is a delay in preferring the appeal, and the Court may not be able to condone the delay beyond four months. The appellate authority does not have the discretion to condone the delay beyond one month after three months from the date of the impugned order. The petitioner, if willing to appeal before the 2nd appellate tribunal, is required to pay 20% of the balance disputed tax.

Constitution of 2nd Appellate Tribunal:
The petitioner sought to avail the remedy by approaching the 2nd appellate tribunal, which has not yet been constituted. As an interim measure, 10% of the tax has already been deposited at the first appeal stage. The Court directed that the penalty and interest amount demanded by the authority shall remain stayed during the pendency of the writ petition, subject to the petitioner depositing the demanded tax amount within two weeks. The attachment of the petitioner's bank account was lifted to facilitate the deposit.

Conclusion:
The Court issued notice to the opposite parties, and the Addl. Standing Counsel accepted the notice on behalf of the Department. The matter was listed for further proceedings after two weeks, along with other related cases. The interim application was disposed of, and timelines were set for filing replies and rejoinders.

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