Facts of the Case

M/s. Swastik Agency, the petitioner, had its first appeal against an assessment order rejected by the First Appellate Authority vide order dated 19.09.2018 on the ground that the appeal was filed after a delay of 361 days and without furnishing the mandatory pre-deposit of 20% of the demanded tax required under Section 77(4) of the Odisha Value Added Tax (OVAT) Act. The petitioner subsequently filed a second appeal, S.A. No. 292(V) of 2018, before the Odisha Sales Tax Tribunal (Second Appellate Authority), which was dismissed by order dated 02.07.2021 (Annexure-4). The petitioner's case was that it had deposited the pre-deposit amount on 01.03.2021 and that this deposit ought to have been considered by the Second Appellate Authority while adjudicating the appeal. Aggrieved by the Tribunal's order, the petitioner approached the High Court of Orissa at Cuttack by way of this writ petition seeking to quash Annexure-4.

Issues Involved

  1. Whether the pre-deposit made by the petitioner on 01.03.2021 could be treated as valid compliance for the purpose of the second appeal.
  2. Whether the Second Appellate Authority erred in not accounting for this deposit while dismissing the appeal.
  3. Whether the writ petition, which did not seek to quash the First Appellate Authority's order, could nonetheless succeed against Annexure-4.

Petitioner's Arguments

  • The order dated 02.07.2021 (Annexure-4) passed by the Second Appellate Authority deserved to be set aside, and an opportunity of hearing be granted.
  • The petitioner had already deposited the pre-deposit amount on 01.03.2021.
  • This deposit ought to have been taken into consideration by the Second Appellate Authority while deciding the second appeal.
  • The Court should quash Annexure-4 and restrain the opposite parties from proceeding further during pendency of the writ petition.

Respondent's Arguments

  • The Standing Counsel for the CT & GST Organization contended that the first appeal itself suffered from a delay of 361 days.
  • The mandatory pre-deposit of 20% of the demanded tax under Section 77(4), OVAT Act, had not been furnished when the first appeal was filed.
  • The pre-deposit was made only in March 2021, over two years after the First Appellate Authority's order dated 19.09.2018, and could not retrospectively validate the earlier default.
  • The writ petition, being devoid of merit, deserved dismissal.

Court Order/Findings

  • The Court held that the pre-deposit requirement under Section 77(4), OVAT Act is a precondition for entertainment of the first appeal, not the second appeal.
  • Since the deposit was admittedly made for the second appeal and not the first, the petitioner's grievance that it was ignored by the Second Appellate Authority was found to be misconceived.
  • The first appeal suffered both from delay of 361 days and non-payment of the pre-deposit, justifying the First Appellate Authority's rejection order dated 19.09.2018.
  • The Sales Tax Tribunal was held correct in passing its order dated 02.07.2021.
  • The Court also noted that the reliefs prayed for in the writ petition never sought quashing of the First Appellate Authority's order, further weakening the case.
  • Finding no merit, the Court declined to entertain the writ petition and dismissed it.

Important Clarification

  • The pre-deposit obligation under Section 77(4), OVAT Act attaches to the stage of filing the first appeal; a deposit made years later, purportedly towards the second appeal, cannot cure a first appeal that was both delayed and non-compliant at inception.
  • Where a first appeal is rejected for delay and want of pre-deposit, the appellate Tribunal in the second appeal is not obliged to revisit or excuse that default based on a subsequent deposit.
  • A writ petitioner must specifically pray for quashing of the order that actually causes prejudice; omitting to challenge the First Appellate Authority's order while impugning only the Tribunal's order can prove fatal to the relief sought.

Sections Involved

  • Section 77(4), Odisha Value Added Tax Act, 2004 — mandates pre-deposit of 20% of the demanded tax as a condition for entertainment of the first appeal.
  • Article 226, Constitution of India — invoked by the petitioner to seek writs of certiorari and mandamus against the appellate orders.

Decision – In Favour of

The writ petition was dismissed, and the decision is in favour of the Department. The Court upheld the orders of both the First Appellate Authority and the Second Appellate Authority (Sales Tax Tribunal), finding no merit in the petitioner's challenge.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No. 34951 of 2023
  • Parties: M/s. Swastik Agency vs Commissioner of CT & GST, Cuttack and others
  • Coram: Acting Chief Justice Dr. B.R. Sarangi and Justice Murahari Sri Raman
  • Order Date: 16.11.2023 (fresh order passed after recall of the earlier order dated 08.11.2023 for correction of typographical errors)

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