Pre-Deposit for Stay of Demand Reduced to 10% Following Government Notification

(Last Updated On: February 13, 2025)

Pre-Deposit for Stay of Demand Reduced to 10% Following Government Notification

Summary in Key Points:

Issue: Should the pre-deposit requirement for staying a First Appellate Authority’s order be modified in light of the new Central and State government notifications?
Facts: The High Court had previously directed assessees to deposit 10% of the disputed tax amount for filing an appeal and an additional 20% for obtaining a stay. However, the Central Government issued a notification on August 16, 2024, reducing the pre-deposit requirement for a stay to 10% of the disputed tax amount. The corresponding State notification was issued on October 29, 2024.
Decision: The High Court modified its earlier directions, now requiring only a 10% deposit of the remaining disputed tax amount for staying the First Appellate Authority’s order.

Important Note: This decision demonstrates the court’s responsiveness to changes in government policy and its commitment to ensuring that pre-deposit requirements are reasonable and not overly burdensome for taxpayers. By aligning its directions with the new notifications, the court provides relief to assessees seeking a stay of demand, making the appeal process more accessible. This ruling reflects a balanced approach that considers both the need to protect revenue and the importance of facilitating taxpayers’ right to appeal.

HIGH COURT OF ORISSA

Jagajyoti Mahanta

Commissioner of CT and GST

Arindam Sinha and M.S. Sahoo, JJ.

W.P.(C) No.32462 of 2024

JANUARY 2, 2025

R.K. Mahanta, Adv. for the Petitioner. S. Das, Adv. ASC for the Respondent.

ORDER

1. Mr. Mahanta, learned advocate appears on behalf of petitioner and submits, his client is aggrieved by order dated 20^th November, 2023 made by the First Appellate Authority. He wants to appeal therefrom to the Tribunal but it has not yet been constituted. In the circumstances assessees and the department were complying with directions made on order dated 16^th February, 2024 by the First Division Bench in a batch of writ petitions, lead case being WP(C) no.42015 of 2023 (M/s. Maa Tarini Traders v. State of Odisha and others).

2. The directions included requiring the assessee to deposit 10% of the disputed amount of tax on filing the appeal and further 20% of remaining disputed tax, for the impugned order to be stayed.

3. He submits, his client is up against State revenue. There was notification dated 16^th August, 2024 made by Central revenue reducing latter deposit to 10%. Now, State revenue has correspondingly notified on 29^th October, 2024. In the circumstances, the writ petition be disposed of as covered by order dated 16^th February, 2024 (supra) with modification for deposit of 10% of remaining disputed tax for impugned order to remain stayed.

4. Mr. Das, learned advocate, Additional Standing Counsel appears on behalf of State revenue.

5. We accept submission made on behalf of petitioner regarding corresponding notification reducing requirement of the deposit to 10% of disputed tax for impugned first appellate order to remain stayed. The deposit be made accordingly.

6. The writ petition is accordingly disposed of.