Facts of the Case

M/s Utkal Steel and Co., Khordha, challenged an audit report dated 30.11.2021 and a consequent GST assessment order dated 15.10.2022 issued by the Commissioner, CT & GST, Odisha, and other tax authorities, demanding deposit of Rs. 3,06,09,459.80 as tax, interest and penalty for the financial year 2017-18. The petitioner's counsel explained that a medical emergency and miscommunication with the firm's Chartered Accountants prevented a timely reply to the notices and payment of the demanded tax. The petitioner stated it had already paid the tax due for that year along with delay interest and that separate notices had also, in what it termed a vindictive manner, been issued to companies associated with it. It offered to produce purchase orders, registers, sale invoices and other records before the authority.

Issues Involved

  1. Whether the audit report and assessment order demanding over Rs. 3 crore in tax, interest and penalty for FY 2017-18 could be examined by the High Court in writ jurisdiction, or whether the petitioner should be relegated to the statutory appeal remedy.
  2. Whether the petitioner was entitled to interim protection from coercive recovery pending any appeal.

Petitioner's Arguments

  • A medical emergency, combined with a communication gap with the firm's Chartered Accountants, prevented a timely response to the department's notices and timely repayment of the demanded amount, and this lapse was neither intentional nor deliberate.
  • The petitioner had already paid the tax due for 2017-18 along with delay interest, and this was not considered by the authority before raising the fresh demand.
  • Notices had been issued, allegedly in a vindictive manner, to other companies associated with the petitioner.
  • The petitioner was ready and willing to produce all relevant records — purchase orders, registers, sale invoices — before the authority for verification.

Respondent's Arguments

The order does not record any separate submissions on behalf of the Commissioner, CT & GST, Odisha, or the other opposite parties; the matter was disposed of on the petitioner's own submissions.

Court Order / Findings

  • The Court did not examine the merits of the audit report or the assessment order, and made no finding on whether the tax, interest or penalty demand of over Rs. 3 crore was correctly computed.
  • The writ petition was disposed of by directing the petitioner to file a statutory appeal before the competent appellate authority, who was directed to decide the appeal on merits after giving the petitioner an opportunity of hearing.
  • Any delay in filing the appeal was left to be dealt with by the appellate authority/Tribunal in accordance with law.
  • As an interim measure, the Court directed that no coercive action be taken against the petitioner until the appeal is disposed of.

Important Clarification

This is a purely procedural order — the High Court did not rule on whether the underlying GST demand of over Rs. 3 crore was justified. Assessees facing a large GST demand who have missed a reply deadline for genuine reasons can, as here, secure interim protection from coercive recovery by promptly approaching the High Court and undertaking to pursue the statutory appeal remedy — but the substantive dispute remains to be argued before the appellate authority, not the High Court.

Sections Involved

  • Odisha Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 — the assessment/audit and appellate framework under which the demand was raised and the appeal was to be filed (statutory appeal provisions such as Section 107 of these Acts).
  • Article 226 of the Constitution of India — writ jurisdiction invoked and disposed of with liberty to appeal.

Decision – In Favour of

The writ petition was disposed of without a decision on merits — the petitioner was relegated to the statutory appeal remedy, with interim protection from coercive recovery granted pending that appeal.

Case Details

Court: High Court of Orissa at Cuttack
Case No.: W.P.(C) No. 30962 of 2023 with I.A. No. 14962 of 2023
Coram: Hon'ble Dr Justice S.K. Panigrahi and Hon'ble Mr Justice G. Satapathy
Date of Order: 27 September 2023

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