Earlier, a division bench of the Orissa High Court had mandated that assessees must deposit 10% of the disputed tax amount to file an appeal. Additionally, to obtain a stay on the order, taxpayers were required to deposit 20% of the remaining disputed tax.
The Orissa High Court recently delivered a significant judgment in the case of Gobinda Chandra Behera Vs Commissioner of CT and GST (WP(C) No. 171 of 2025). This ruling provides crucial relief to taxpayers by reducing the tax deposit requirement for obtaining a stay on GST appeal orders.
Background of the Case
The petitioner, Mr. Gobinda Chandra Behera, had challenged an order dated November 28, 2024, issued by the First Appellate Authority. Mr. Behera intended to appeal the order but faced procedural hurdles due to the absence of a constituted GST Tribunal. The lack of a functional tribunal effectively blocked taxpayers from filing their appeals, leading to legal and financial uncertainty.
Previous Court Directives on Tax Deposit
Earlier, a division bench of the Orissa High Court had mandated that assessees must deposit 10% of the disputed tax amount to file an appeal. Additionally, to obtain a stay on the order, taxpayers were required to deposit 20% of the remaining disputed tax. This requirement placed a significant financial burden on businesses and individuals contesting tax demands.
Government Notifications on Tax Deposit Reduction
To ease the compliance burden, the Central Revenue Department issued a notification on August 16, 2024, reducing the deposit requirement for a stay on GST appeals to 10% of the remaining disputed tax. Following this, the State Revenue Department of Odisha issued a corresponding notification on October 29, 2024, aligning state policies with the revised central directive.
Also Read: Bombay High Court Accepts GST Officials’ Apology for Premature Arrest Before Statement Recording
Court’s Ruling on Tax Deposit Reduction
In light of these changes, the petitioner sought a modification of the previous directive, arguing that the reduced deposit requirement should apply to his case. The Orissa High Court accepted this contention and revised its earlier order. The court ruled that Mr. Behera would need to deposit only 10% of the remaining disputed tax for the stay on the impugned order to take effect.
Significance of the Judgment
This judgment is a landmark decision for businesses and individuals facing tax disputes under the GST framework. Key takeaways include:
- Reduced Financial Burden: The reduction in deposit requirements makes it easier for taxpayers to contest disputed tax demands without excessive financial strain.
- Legal Clarity: The ruling sets a precedent for similar cases, ensuring uniformity in tax appeal procedures.
- Government Alignment: The decision reinforces the implementation of the revised government notifications, ensuring consistency between judicial directives and administrative policies.
Conclusion
The Orissa High Court’s decision in Gobinda Chandra Behera Vs Commissioner of CT and GST marks a positive step towards taxpayer relief and legal clarity in GST appeals. With the reduced deposit requirement, assessees now have a more accessible and financially feasible pathway to challenge disputed tax orders. This ruling is expected to benefit numerous businesses and individuals facing similar legal battles under the GST regime.
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