Stayed the demand of penalty and interest in absence of GST Appellate Tribunal

[CA Bimal Jain]

The Hon’ble Orissa High Court in PRAFULLA KUMAR SAHOO VERSUS COMMISSIONER OF CT & GST ODISHA, BANIJYAKAR BHAWAN & OTHERS - 2023 (5) TMI 1145 - ORISSA HIGH COURT had stayed the demand of penalty and interest raised by the Revenue Department, during the pendency of writ petition, subject to the condition that the assessee deposits the entire amount of tax demanded within a period of 15 days, since the assessee wanted to avail the remedy under the provisions of law by approaching GST Appellate Tribunal (“GSTAT”).

Facts:

This petition has been filed by Prafulla Kumar Sahoo (“the Petitioner”) challenging the Order dated April 12, 2023 (“the Impugned Order”) passed the by Joint Commissioner of State Tax (Appeal) (“the First Appellate Authority”) demanding the amount of penalty and interest, wherein, the appeal preferred by the Petitioner under Section 107(1) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) had been rejected.

The Petitioner contended that the Petitioner is not liable to pay the tax and penalty against the Impugned Order as the Petitioner had already deposited 10% of the demanded tax amount before the First Appellate Authority and there is no GSTAT constituted as on date.

Issue:

Whether the demand of interest and penalty is liable to be stayed in absence of the GSTAT?

Held:

The Hon’ble High Court in PRAFULLA KUMAR SAHOO VERSUS COMMISSIONER OF CT & GST ODISHA, BANIJYAKAR BHAWAN & OTHERS - 2023 (5) TMI 1145 - ORISSA HIGH COURT held as under:

• Issued notice to the Revenue Department.
• Noted that, in case the Petitioner wants to avail the remedy by preferring appeal before the GSTAT, the Petitioner would be liable to pay 20% of the disputed tax for consideration of its appeal.
• Observed that, the Petitioner wants to avail the remedy under the provisions of law by approaching GSTAT, which has not yet been constituted.
• Held that, the amount of penalty and interest demanded shall remain stayed during pendency of the petition, subject to the condition that the Petitioner deposits the entire amount of tax demanded within a period of 15 days.

Relevant provision:

Section 112(1) of the CGST Act:

“Appeals to Appellate Tribunal

112. (1) Any person aggrieved by an order passed against him under section 107 or section 108 of this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.”

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