JUSTICE JASWANT SINGH

M/s P.K. Ores Pvt. Ltd. v Commissioner of Sales Tax and Anr.

Case Number: WP(C) No. 10335 of 2022

Coram: Justice Jaswant Singh, Justice M.S. Raman

Date of decision: 6th May, 2022

In this case, the Petitioner had challenged the order passed by the Commissioner of CT & GST, Odisha under Section 80 of the Odisha Goods and Services Tax Act, 2017 (“the OGST Act”) read with Rule 158 of the Odisha Goods and Services Tax Rules, 2017 (“the OGST Rules”), which was directed against the demand of interest for the periods from April, 2019 to December, 2019 raised by the CT&GST Officer, Bhubaneswar-II Circle, Bhubaneswar for belated deposit of admitted tax. It was the contention of the Petitioner that non-payment of admitted tax was attributed to non-disbursal of substantial amount standing due from IDCOL, a Government Agency.

The Respondent clarified that the Petitioner was not in a position to discharge demand of interest as raised by the CT&GST Organisation on account of such belated deposit of admitted tax, owing to which, the petitioner had prayed before the Commissioner of CT & GST, Odisha to allow it to discharge interest demand to the tune of Rs.68,15,506/- by instalments. In this regard, the Petitioner contended that the Commissioner of CT & GST being vested with power under Section 80 of the OGST Act should have allowed its application in Form GST DRC-20 filed in consonance with Rule 158 of the OGST Rules and should have facilitated the petitioner by allowing it to discharge the liability towards the huge burden of interest. The Respondent herein contended that the claim of the Petitioner was contrary to the express language of Section 80 of the OGST Act. The issue raised was whether the Commissioner of CT & GST is justified in rejecting the prayer of the petitioner to deposit the interest levied on account of belated deposit of admitted tax as per self-assessed returns furnished in terms of Section 39 read with Section 59 of the CGST/OGST Act in instalment under Section 80 read with Rule 158?

The Court observed that Section 39(7) of OGST Act requires every registered person, who is required to furnish a return, is to pay to the Government the tax due as per such return not later than the last date on which the return is to be furnished. It further observed that the liability to pay interest under Section 50, being compensatory for non-deposit of tax within the stipulated period envisaged under Section 39, is not penal in nature. Therefore, the petitioner cannot escape the rigours of liability of interest. While relying on the case of EID Parry (India) Ltd. v. Assistant Commissioner of Commercial Taxes ((2005) 141 STC 12 (SC)), this Court iterated that “when the levy of interest emanates as a statutory consequence and such liability is a direct consequence of non-payment of tax, such a levy is different from the levy of interest which is dependent on the discretion of the assessing officer. The default arising out of non-payment of tax on an admitted liability in the case of self-assessment attracts automatic levy of interest, whereas the default in filing incomplete and incorrect return attracts best judgment assessment in which the levy of interest is based on the adjudication by the assessing officer.”

With this observation, this Court held that the Commissioner of CT & GST is justified in rejecting the prayer of the petitioner to deposit the interest levied on account of belated deposit of admitted tax as per self-assessed returns furnished in terms of Section 39 read with Section 59 of the CGST/OGST Act in instalment under Section 80 read with Rule 158.

M/s. Nagen Caterer v. Central Board of Indirect Taxes & Customs and others

Case Number: WP(C) No. 21073 of 2021

Coram: Justice Jaswant Singh, Justice M.S. Raman

Date of decision: 15th March, 2022

In this case, the Petitioner had challenged the Demand-cum-Show Cause Notice issued by the Additional Commissioner GST & Central Excise, Bhubaneswar Commissionerate (“Adjudicating Authority”) under Sections 73, 75, 76 and 78 of the Finance Act, 1994 pertaining to the periods 2015-16 and 2016-17 while contending that the same is barred by limitation. The petitioner claimed to be a partnership firm which provided outdoor catering services and got registered under the Finance Act, 1994. The Adjudicating Authority had contended that the Petitioner having received considerable amount from different service recipients has made neither full disclosure of the amount in the returns in Form ST-3 nor had it filed the returns in Form ST-3 for certain period, thereby, it had evaded payment of service tax. Therefore, the Adjudicating Authority proposed to proceed with determination of tax, interest and penalty for the periods 2015-16 and 2016-17.

The Petitioner contended that the Adjudicating Authority had no jurisdiction to issue the Demand-cum-Show Cause Notice as Section 73(1) of the Finance Act, 1994 envisages action for non-payment of service tax or short payment of service tax by the authorities within eighteen months from the relevant date, and since the case does not fall within the ingredients mentioned under proviso thereto, the extended period of limitation does not get attracted in the present context. The Adjudicating Authority contended that it had issued the said impugned notice invoking proviso to sub-section (1) of Section 73 of the Finance Act, 1994. Moreover, by virtue of amendment vide Finance Act, 2012, the normal period of “eighteen months” has been substituted by “thirty months”.

This Court observed that Section 73 (1) provides that the competent authority may within thirty months from the relevant date serve a notice on the assessee where service tax has not been levied or paid or short levied or short paid or is erroneously refunded. This Court relied on the case of Union of India v. Coastal Container Transporters Association ((2019) 20 SCC 446), wherein the Supreme Court has held that it is not proper to entertain writ petitions at the stage when alternative remedy under statute is available.

This Court observed that even though point of limitation is raised as a matter of jurisdictional fact, the same being mixed question of fact and law, the Petitioner had ample opportunity to agitate such an issue before the Adjudicating Authority and that entertaining the writ petition at the stage of notice would be premature. Therefore, the Court dismissed the writ petition and allowed the Petitioner a further period of four weeks from availability of the instant order to file reply/objection to the Show Cause Notice dated 22.04.2021.