2022 (8) TMI 401 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - Vires of Clause (c) of Sub-Section (2) of Section 16 of the Odisha Goods and Services Tax Act, 2017 - Input tax credit - HELD THAT - Issue notice for 15th November, 2021. Seeking stay on further proceedings - HELD THAT - The Petitioner is directed to deposit 20% of the tax as determined vide assessment order dated 12th May, 2022 passed under Section 73 of the OGST/CGST Act within a period of four weeks from today - In the event of such deposit, no coercive action shall be taken against the Petitioner till disposal of the writ petition.

Summary

Issues:
Challenge to the vires of Clause (c) of Sub-Section (2) of Section 16 of the Odisha Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017.
Assessment of tax liability on the Petitioner due to non-filing of Form-GSTR-3B by the supplier.
Availability of remedy of appeal under Section 107 of the OGST/CGST Act.
Prayer for stay of further proceedings and direction not to take coercive action till disposal of the writ petition.

Analysis:
The judgment by the Orissa High Court involves a challenge to the vires of Clause (c) of Sub-Section (2) of Section 16 of the Odisha Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017. The Petitioner contested an order raising a substantial demand against them, arguing that it is unjust to hold them liable for the supplier's non-compliance with Form-GSTR-3B. Mr. Jagabandhu Sahoo, Senior Counsel for the Petitioner, emphasized the unfairness of imposing additional tax, interest, and penalty on the Petitioner who had already paid the tax. The Court noted the constitutional challenge based on Articles 14 and 19 (1) (c) read with Article 265 of the Constitution of India, prompting a request for a counter affidavit by the CT & GST Organization.

The Court acknowledged the availability of an appeal remedy under Section 107 of the OGST/CGST Act despite the challenge to the statutory provision's validity. Mr. Sunil Mishra, Addl. Standing Counsel for the CT & GST Organization, highlighted this point while seeking an opportunity to file a counter affidavit. The Court issued notice for further proceedings on 15th November, 2021, and directed the Petitioner to provide a copy of the writ petition to the Assistant Solicitor General representing the Opposite Party No.1. Additionally, the Additional Govt. Advocate and Addl. Standing Counsel for the other Opposite Parties waived notice, with instructions for the Petitioner to serve copies of the writ petition to them promptly.

In an Interlocutory Application (I.A. No. 7004 of 2022), the Petitioner sought a stay on further proceedings and requested a directive against coercive actions until the writ petition's disposal. After considering the submissions, the Court directed the Petitioner to deposit 20% of the tax amount determined in the assessment order passed under Section 73 of the OGST/CGST Act within four weeks. Upon such deposit, no coercive action was permitted against the Petitioner until the final disposal of the writ petition. An urgent certified copy was ordered to be issued as per rules to facilitate compliance with the directives.