Orissa High Court
M/S. Indera Motors vs The Commissioner Of Commercial .... ... on 8 April, 2025
Author: B.P. Routray
Bench: B.P. Routray
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.6382 of 2025
M/s. Indera Motors, Rourkela .... Petitioner
-Versus-
The Commissioner of Commercial .... Opposite Parties
Taxes, CT and GST, Odisha and Others
Advocates appeared in this case:
For Petitioner : Mr. Sidhartha Ray, Senior Advocate
Mr. K.K. Sahoo, Advocate
For Opposite Parties : Mr. Sunil Mishra, Senior Standing Counsel
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE B.P. ROUTRAY
JUDGMENT
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Date of hearing and judgment: 8th April, 2025
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HARISH TANDON, CJ.
1. The demand for payment of interest @ 9% from the date of filing
of the return is raised against the petitioner by the Joint Commissioner
of Sales Tax, CT & GST Circle, Rourkela II, Panposh vide letter
No.2327/CT & GST dated 05.02.2025.
2. The challenge is made to the said demand on multiple grounds
including that the spate of litigations initially poured in docket of this
Court assailing the demand of the entry tax under the Orissa Entry Tax
Act, 1999 (OET Act) and the same was decided in favour of the
assessee upholding their contention was held to be intra vires and
further directions were passed in relation to the modalities of the
transactions ensued within and outside the State of Odisha.
3. The matter travelled to the Apex court and an interim order was
passed directing the assessee to pay 1/3rd of the demand and the rest
portion of the demand was kept in abeyance until the final decision is
taken. It is not in dispute that a civil appeal was disposed of by the
Supreme Court on 28th March, 2017 upholding the vires of the Act and
the competence of the department to impose tax in relation to the
transactions as specified therein.
4. Despite the decision having taken by the Apex Court, the
litigation did not receive quietus as batch of writ petitions were filed
before this Court, assailing the decision to imposition of the interest
from the period as demanded by the department. Admittedly, the
petitioner was one of the litigants in the said batch of writ petitions
which were disposed of on 15th March, 2023 with two directions;
firstly, the remaining amount equivalent to 2/3rd of the demand shall be
paid with an interest from the date of the order of the Supreme Court.
Secondly, so far as the interregnum period from the date of filing of the
return till the judgment of the Supreme court as aforesaid,
compensatory interest @ 9% shall be charged on the assessee by the
department.
5. The matter has now travelled to the Apex Court both at the
behest of the Department as well as some of the assessees and the leave
have already been granted and the civil appeal is now pending. It is not
in dispute that the interim order to the effect that no coercive step shall
be taken against the assessee-petitioner, who approached the Supreme
Court, is also passed.
6. The petitioner contends that since the Apex court has passed an
interim order as aforesaid, it would inure to the benefit of all the
assessees whether made party in the civil appeal or not as such order is
to operate in rem or not in personem. According to learned Senior
Counsel appearing for the petitioner, since the Apex court is in seisin of
the matter and an interim order has been passed, the Department cannot
raise demand on interest for such interregnum period. It is further
submitted that the remaining 2/3rd amount of tax along with the interest
has already been deposited by the petitioner after the judgment of the
Supreme Court and, therefore, the petitioner cannot be termed as a
defaulter in discharge of its obligation foisted upon it under the statute.
7. Mr. Sunil Mishra, learned Standing Counsel appearing for the
opposite party-Department refuted the contentions of the petitioner in
contending that the petitioner has not approached the Apex Court
against the order of this Court passed on 15 th March, 2023 and,
therefore, cannot reap the benefit of the interim order. In other words, it
is sought to be contended that the interim order is restricted to the
petitioners, who have filed the special leave petition before the Supreme
Court and, therefore, to be construed as an order in personem and not in
rem. It is further submitted that once the writ petitioner has accepted the
order of the Court dated 15th March, 2023 having not challenged before
the apex court, the instant writ petition is in fact filed seeking review of
the said order, which is impermissible in law.
8. On the conspectus of the aforesaid submission so advanced, it is
no longer in dispute that a batch of writ petitions including the writ
petition filed by petitioner were disposed of by a common judgment
passed by this Court on 15th March, 2023 and the petitioner till date has
not assailed the said order before the Apex Court.
9. We have not been taken to any material that the operation of the
said order is stayed by the Apex Court but the interim order is passed
against the department not to take any coercive step for non-deposit of
the interest/principal amount in respect of the petitioner of the said
special leave petition. Whether the High Court was within its
competence to direct the compensatory interest to be levied on the
assessee for the interregnum period between the date of filing of the
return and the judgment of the Apex Court, is a matter to be decided by
the Apex Court. Since there is no express order of stay of operation of
the said order and the petitioner being not an applicant in any of the
special leave petitions pending before the Supreme Court, we do not
find any justification in extending the benefit of the interim order at this
stage. Furthermore, in order to bring equilibrium between the rights of
the parties, any deposit as demanded would sub serve the justice as the
same would be subject to an outcome of the decision taken by the apex
Court provided it inure to the benefit of all the assessees whether they
approached the apex Court or not. We are conscious that because of the
confusion having created in the mind of the several assessees on the
applicability of the interim order, we feel that an opportunity should be
given to the petitioner to deposit the said demand within two months
from today. Such deposit shall be without prejudice to the rights and
contentions of the parties.
10. With these observations, the writ petition is disposed of. No order
as to costs.
( Harish Tandon )
Chief Justice
( B.P. Routray )
Judge
SK Jena/Secy.
Location: High Court of Orissa, Cuttack.
