2022 (7) TMI 705 - HC - GST

Seeking grant of stay of recovery of demand of interest calculated on delayed payment of admitted tax - appeal has been summarily rejected under Section 107 of the Odisha Goods and Services Tax Act, 2017 - HELD THAT - This Court is not inclined to go into factual disputes. However, considering the reconciliation statements filed by both sides on the peculiar facts of the present case, it would be mete and proper if the Petitioner deposits a sum of Rs.9,25,43,693.52, the order(s) dated 24th May, 2022 passed by the Appellate Authority shall stand set aside and the appeal(s) shall be restored to file for adjudication on merits unless other defects, if any, as required under the statute is removed. Since all the bank accounts have been seized and the Petitioner is unable to operate, it is not possible to deposit the entire admitted interest at one go. Therefore, he prayed for lifting forthwith the attachment on the Bank to enable it to deposit Rs.5,00,00,000/- within 48 hours and the Petitioner undertakes to deposit rest of the amount out of Rs.9,25,43,693.52 in two equated fortnightly instalments but not later than 16th August, 2022 - Upon such deposit of the aforesaid amount, the Revenue/Opposite Parties shall forthwith ensure the withdrawal of all the attachments made in pursuance of the original demand(s). Petition disposed off.

Summary

Issues:
Challenge to appellate order summarily rejecting appeal under Section 107 of OGST Act, 2017; Preclusion to challenge order due to absence of Tribunal; Garnishee proceeding under Section 79 of OGST Act; Levying interest on delayed tax payment; Mandatory pre-deposit of interest under Section 107(6)(a) of OGST Act; Self-assessment of interest liability under Section 50; Dispute over interest calculation; Reconciliation of interest amount; Restoration of appeal for adjudication on merits; Petitioner's request for phased payment of admitted interest.

Analysis:

1. Challenge to Appellate Order:
The Petitioner challenged the order summarily rejecting the appeal under Section 107 of the OGST Act, 2017, related to tax periods from 2017-18 to 2020-21. The Petitioner contended that the appeal was rejected summarily without the opportunity to challenge it further due to the absence of a Tribunal, leading to garnishee proceedings under Section 79 of the OGST Act.

2. Mandatory Pre-Deposit of Interest:
The First Appellate order highlighted the mandatory pre-deposit of interest in full under Section 107(6)(a) of the OGST Act, 2017, for entertaining the appeal. As the Petitioner failed to furnish proof of payment of interest, the appeal was found defective and summarily rejected, emphasizing the necessity of pre-deposit for consideration of the appeal's merit.

3. Self-Assessment of Interest Liability:
The assessment order passed by the Deputy Commissioner under Section 75(12) of the OGST Act was based on the Petitioner's delay in depositing admitted tax without paying interest. The Court clarified that interest computation under Section 50 is self-imposed by the taxpayer, requiring timely payment based on self-assessment, as supported by relevant case laws.

4. Dispute Over Interest Calculation:
The Petitioner disputed the interest liability determination and proposed a phased payment plan for the admitted interest amount. The Court considered the reconciliation statements from both parties and directed the Petitioner to deposit the admitted interest to set aside the Appellate Authority's orders for restoration of appeals.

5. Restoration of Appeal and Phased Payment Request:
In light of the Petitioner's inability to pay the entire admitted interest at once due to seized bank accounts, the Court allowed phased payments with a deadline. Upon compliance, the Revenue was directed to withdraw all attachments, and the Petitioner's request for phased payment was granted.

This detailed analysis covers the key issues raised in the legal judgment, addressing the challenges faced by the Petitioner regarding the appellate order, mandatory pre-deposit of interest, self-assessment of interest liability, reconciliation of amounts, and the Court's decision to allow phased payment of admitted interest.