M/S Utkal Udyog vs. Commissioner CT And GST

Facts

The Petitioner, M/s. Utkal Udyog, filed a writ petition before the Orissa High Court challenging the mandatory pre-deposit requirement of 10% of the demand under Section 107 of the Orissa Goods and Service Tax Act (OGST Act), read with Rule 108 of the OGST Rules, to file an appeal. The Petitioner contended that it lacked the financial means to make the pre-deposit, hindering its ability to file the appeal. The Petitioner relied on a decision from the Punjab and Haryana High Court in Kelmar (India) Exports v. State of Punjab, where a similar pre-deposit was reduced. The Opposite Parties were the Commissioner CT & GST and Others.

Held

The Court held that Section 107 of the OGST Act, read with Rule 108 of the OGST Rules, is a mandatory provision. The Court found no discretion vested with the appellate authority to waive the pre-deposit requirement, nor could the High Court direct the appellate forum to act contrary to the statute. Regarding the precedent cited by the Petitioner, the Court noted that the Kelmar (India) Exports case was decided under the Punjab Value Added Tax Act and that the facts and statutory context were different. The Orissa High Court was not persuaded to adopt the same approach. The Court observed that upon making the 10% pre-deposit, there is an automatic stay of the balance 90% of the demand, which it considered not unfair or unreasonable. Consequently, the Court was not inclined to entertain the writ petition.

Key Issues

1. Whether the Court, under Article 226 of the Constitution, can direct the waiver or reduction of the 10% pre-deposit mandated by Section 107 of the OGST Act, read with Rule 108 of the OGST Rules, to enable the Petitioner to file an appeal, given its financial constraints? Petitioner's Argument: The Petitioner argued that due to its inability to make the pre-deposit, it cannot even upload its appeal. It relied on the Punjab and Haryana High Court's decision in Kelmar (India) Exports v. State of Punjab to support its plea for waiver or reduction of the pre-deposit. Opposite Parties' Argument: The judgment does not record any specific arguments made by the Opposite Parties, but the Court's reasoning implies that the statutory provision is mandatory.