[Cites 5, Cited by 0]
Orissa High Court
M/S. Ghanshyam Misra And Sons (P) vs Commissioner Of Commercial Taxes on 16 March, 2026
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
WP(C) No.7264 of 2026
M/s. Ghanshyam Misra and Sons (P) ... Petitioner
Ltd.
Mr. Jagabandhu Sahoo, Senior Advocate
assisted by Ms. Kajal Sahoo, Advocate
-Versus-
Commissioner of Commercial Taxes, ... Opposite Parties
Odisha and another
Mr. Sunil Mishra, Standing Counsel
for CT & GST Department
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 16.03.2026
02. 1. Assailing the order dated 16th February, 2026 passed by the
Commissioner of Sales Tax, Odisha, rejecting the petition for stay of
recovery of demand as confirmed in the first appeal during the
pendency of the second appeal before the Odisha Sales Tax Tribunal,
the petitioner has approached this Court by way of filing this writ
petition beseeching indulgence invoking provision under Articles
226 and 227 of the Constitution of India.
2. The petitioner, stated to have effected inter alia inter-State
sales during the tax periods from 1st July, 2012 to 31st March, 2014.
In the audit assessment undertaken under Section 42 of the Odisha
Value Added Tax Act, 2004 (for short, "the OVAT Act"), Rule 12 of
the Central Sales Tax (Odisha) Rules, 1957 and the Odisha Entry
Tax Act, 1999 (for short, "the OET Act") though certain declarations
in Form-C and export documents were furnished, in absence of
production of grade-wise, dealer-wise purchase and sales statement
along with evidence/documents and mining permit, the transactions
were construed to be intra-State transactions; as a result of which, the
transactions were subjected to levy of tax under the OET Act.
2.1. The order of assessment was challenged in the first appeal,
which came to be disposed of vide order dated 28th March, 2025 by
the Additional Commissioner of Sales Tax (Appeal), Balasore,
wherein the following order was passed:-
"On the above scenario, it is a very clear that the dealer appellant
did not produce any supporting documents neither before the audit
team nor the ld. Assessing Authority to defend their case. Further
after availing sufficient opportunities, the dealer appellant also
failed to appear before this forum to defend their case. As such
purchase suppressions and sale suppression as reported by the audit
team are established by the ld. Assessing Officer basing on the
allegation raised by the audit team is correct and no interference.
In the result, I do not find any good ground to interfere in the
assessment order passed on dt.05.12.2015 by the ld. Deputy
Commissioner of Sales Tax, Mayurbhanj Circle, Baripada (now CT
& GST Circle, Mayurbhanj, Baripada) which is confirmed."
3. Learned Senior Advocate appearing for the petitioner
submitted that the petitioner filed the second appeal under Section 17
of the OET Act and moved a petition for stay of realization of
outstanding demand before the Commissioner of Sales Tax as
provided under sub-section (7) of the Section 17 of the OET Act.
3.1. It is further submitted that the Commissioner vide order
dated 16th February, 2026 without appreciating the fact of submission
of statutory declarations in Form-C covering inter-State sales to the
extent of Rs.240,32,35,787/- before the assessing authority in proper
perspective and she did not show inclination to grant stay of
realization of balance demand amount during pendency of the second
appeal before the Odisha Sales Tax Tribunal, notwithstanding that
the dealer had deposited 20% of the demanded tax during the
pendency of the first appeal in terms of sub-section (4) of Section 16
of the OET Act.
4. Learned Standing Counsel appearing for the CT & GST
Organisation vehemently opposing the contention made by the learned
Senior Advocate for grant of stay of recovery of demand, submitted that
the finding recorded by the Assessing Authority as well as the First
Appellate Authority cannot be faulted with as the dealer failed to
substantiate the claim of inter-State sale by placing demonstrable
documents as sought for by the authorities concerned for verification; as
such the demand raised by the Assessing Authority is reflective of non-
discharge of liability towards payment of entry tax. Hence, he urged to
dismiss the writ petition as there is legal justification in rejection of the
application for stay of realization by the Commissioner of Sales Tax.
4.1. He further submitted that the demand so raised is on account of
non-production of relevant documents and non-appearance of the dealer
during the course of the audit assessment as well as at the stage of hearing
of the first appeal. Therefore, no flaw can be attributed to the authorities in
determining the liability.
5. Heard Mr. Jagabandhu Sahoo, learned Senior Advocate
appearing for the petitioner and Mr. Sunil Mishra, learned Standing
Counsel appearing for the Commercial Tax and Goods and Services Tax
Organisation.
6. Perused the record. Having gone through the order dated 16th
February, 2026 of the Commissioner of Sales Tax, Odisha, it is revealed
that:-
"***On careful examination of the stay petition, submissions
made by the dealer, and the records available, it is observed that
the demand confirmed by the First Appellate Authority is
primarily based on non-submission of mandatory statutory
documents, including "C" Forms and mining permits. The
dealer has failed to produce these documents either before the
Assessing Officer or before the First Appellate Authority.
It is further noticed that the matter is presently pending
before the Hon'ble Odisha Sales Tax Tribunal, Cuttack, for
necessary adjudication.
Considering the magnitude of suppression determined and the
absence of prima facie merit the dealer's submissions at this
stage, the undersigned does not find any cogent grounds to
grant any stay on the realization of the assessed demand.
Accordingly, the revision petition is disposed of, and the
Assessing Officer is at liberty to proceed with collection of the
balance demand amount in accordance with the provisions of
law.
The petition is disposed of accordingly."
7. The assessment order and also the first appeal order reveals
that though sufficient adjournments were granted by the authorities
concerned in order to extend opportunities to furnish documents/evidence
in support of the claim of the petitioner, he failed to produce such requisite
documents for the purpose of verification or examination of veracity of
such claims made. The Appellate Authority lucidly stated that the dealer
did not produce any supporting document neither before the audit team
nor before the Appellate Authority. Such being the position, this Court
does not find any plausible explanation offered by the petitioner nor
before the Commissioner nor this Court. Except saying that the
Commissioner of Sales Tax on appreciating pre-deposit made by different
dealers as per sub-section (4) of Section 16 during the pendency of the
first appeal granted stay of realization of balance demanded tax, nothing is
argued as to why the petitioner-dealer defaulted in producing relevant
material before the audit team, the assessing authority and the appellate
authority. This Court is conscious of the fact that the interim orders passed
during pendency of second appeal are not binding. Sub-section (7) of
Section 17 of the OET Act vests discretion in the Commissioner of Sales
Tax to stay the realization of outstanding demanded tax as a result of
disposal of appeal under Section 16(7) before the learned Odisha Sales
Tax Tribunal. Having noticed that the dealer failed produce material
evidence before the audit team, the assessing authority as also the
appellate authority, the Commissioner of Sales Tax declined to grant stay
realization of the balance demanded tax.
8. Be that as it may, taking into consideration the submission of the
learned Senior Advocate that the petitioner has deposited 20% of the tax
demanded by virtue of the assessment order framed under Section 9C of
the OET Act during the pendency of the first appeal in terms of sub-
section (4) of Section 16 of the OET Act, in order to maintain the balance
of convenience this Court directs the petitioner to deposit 30% of the
balance tax as demanded in the assessment on or before 31st March, 2026.
In the event of such deposit being made within the period stipulated, no
coercive measure shall be taken against the petitioner for recovery of rest
of the demand raised in the assessment order dated 21st November, 2015
with respect to the tax periods from 01.07.2012 to 31.03.2014 during the
pendency of the second appeal before the learned Odisha Sales Tax
Tribunal. It is made clear that if the petitioner fails to comply with the
aforesaid direction, the authority concerned is at liberty to carry out the
direction of the Commissioner of Sales Tax vide order dated 13th
February, 2026. Needless to observe that the hearing of second appeal
shall be expedited.
9. With the aforesaid observation and direction, the writ petition
stands disposed of. As a result of disposal of the writ petition, all pending
Interlocutory Application (s), if any, shall stand disposed of.
(Harish Tandon)
Chief Justice
Signed by: LAXMIKANT MOHAPATRA
Judge
Designation: Senior Stenographer
Reason: Authentication MRS/Laxmikant
Location: High Court of Orissa, Cuttack
Date: 19-Mar-2026 17:49:46
