Jyoti Construction VS Deputy Commissioner of CT

Five writ petitions were brought before the court, all challenging orders dated April 28, 2021, issued by the Additional Commissioner of Sales Tax (Appeal), Central Zone, Odisha. These orders rejected appeals filed by the Petitioners under Section 107(1) of the Odisha Goods and Services Tax Act, 2017 (OGST Act). The crux of the issue was the rejection of appeals on the grounds of defects, specifically due to the Petitioners’ failure to make a pre-deposit payment of 10% of the disputed amount as required under the law. The court addressed these matters collectively due to their common factual background.

Five writ petitions were brought before the court challenging orders dated April 28, 2021, issued by the Additional Commissioner of Sales Tax (Appeal), Central Zone, Odisha. These orders rejected appeals filed under Section 107(1) of the Odisha Goods and Services Tax Act, 2017 (OGST Act). The basis for rejection was that the petitioner had debited the electronic credit ledger (ECRL) instead of the electronic cash ledger (ECL) to make a mandatory pre-deposit of 10% of the disputed amount under IGST, CGST, and SGST. This action was deemed contrary to Section 49(3) of the OGST Act read with Rule 85(4) of the OGST Rules, 2017.

Identical orders were issued for each of the periods between March and July 2020, resulting in five separate petitions before the court. The petitioner, a partnership firm engaged in works contracts including civil, electrical, and mechanical works, was represented in court by Mr. Ajit Kumar Roy. The Department was represented by Mr. Sunil Mishra, learned Additional Standing Counsel.

The Deputy Commissioner of CT & GST, Barbil Circle, Jajpur, Odisha (Opposite Party No.1) had raised demands for each of the specified periods, forming the basis of the appeals and subsequent writ petitions.

cannot be withdrawn for making any payment other than payment of tax liability under the Act. Therefore, the Petitioner contended that the payment made from the ECRL towards the pre-deposit was valid and in compliance with the statutory provisions. It was argued that the restriction under Section 49(4) does not extend to payments made towards pre-deposit under Section 107(6) of the OGST Act.

However, the Department, represented by Mr. Sunil Mishra, Additional Standing Counsel, argued that the statutory provisions clearly mandate that the pre-deposit must be made by debiting the Electronic Cash Ledger (ECL), and any payment made otherwise, such as from the Electronic Credit Ledger (ECRL), renders the appeal defective and liable for rejection.

The key issue before the Court was the interpretation of Section 107(6) read with Section 49(3) of the OGST Act and Rule 85(4) of the OGST Rules, specifically concerning the method of payment of the pre-deposit. The Petitioner asserted that the restriction under Section 49(4) does not apply to pre-deposit payments, whereas the Department contended that such payments must strictly adhere to the method prescribed under the law.

After hearing both sides, the Court considered the statutory provisions, the arguments presented, and the facts of the case. It noted that the appeal filed by the Petitioner was rejected solely on the ground that the pre-deposit was made from the ECRL instead of the ECL. The Court also took into account the identical nature of the orders passed for multiple periods, emphasizing the commonality of issues raised across the petitions.

Ultimately, the Court’s decision would hinge on whether the method of payment of the pre-deposit as done by the Petitioner was in conformity with the provisions of the OGST Act and Rules. The outcome of these writ petitions would significantly impact the procedural requirements and interpretations applicable to such appeals under the GST regime in Odisha.

The case involves multiple writ petitions challenging orders dated April 28, 2021, issued by the Additional Commissioner of Sales Tax (Appeal), Central Zone, Odisha. These orders rejected appeals under the Odisha Goods and Services Tax Act, 2017 (OGST Act), stating that the appeals were defective because the petitioners had made pre-deposit payments (10% of the disputed amount) using their electronic credit ledger (ECRL) instead of the required electronic cash ledger (ECL). This was deemed a violation of Section 49(3) of the OGST Act read with Rule 85(4) of the OGST Rules, 2017.

The petitions concern demands raised for IGST, CGST, and SGST, including interest, for the periods of March, April, May, June, and July 2020. Each petitioner, engaged in executing works contracts, filed appeals electronically (Form-GST APL-01) against the demands before Opposite Party No.2, the appellate authority.

Under Section 107(6) of the OGST Act, petitioners were required to pre-deposit 10% of the disputed tax amount when filing appeals, debiting their ECL. However, the department insisted that this pre-deposit must be made via the ECL, not the ECRL. Notices were issued to the petitioners for using the ECRL, leading to the rejection of their appeals.

The petitioner’s argument, presented both before the appellate authority and the court, hinges on Section 49(4) of the OGST Act, which allows the ECRL to be used for “any payment towards output tax” under prescribed conditions. They interpret “output tax” under Section 2(82) to encompass the tax payable under the Act on taxable supplies, contending that the pre-deposit qualifies for payment through the ECRL.

The matter is significant as it challenges the interpretation and application of statutory provisions governing tax appeals and pre-deposit requirements under the OGST Act and its Rules. The court has heard arguments from both parties, with Mr. Ajit Kumar Roy representing the petitioners and Mr. Sunil Mishra appearing for the department, and is now considering these arguments to resolve the issue across all five petitions.

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