Orissa High Court
M/S. Magnum Estates Private Limited vs Additional Commissioner on 15 July, 2026
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.34660 of 2025
In the matter of an Application under
Articles 226 and 227 of the Constitution of India, 1950
***
M/s. Magnum Estates Private Limited
(A company registered under
the Companies Act)
represented by its
Executive Director
Sri C.V. Padmarajan
Aged about 80 years
Son of Late C.V. Kelappan
At: Sector-A, Zone-A, Plot No.132-A
Mancheswar Industrial Estate
Mancheswar, Bhubaneswar
Odisha – 751 010. … Petitioner
-VERSUS-
1. Additional Commissioner, GST (Appeals)
At: Central Excise & Customs
Central Revenue Building, Rajaswa Vihar
Bhubaneswar-7, Odisha.
2. Superintendent
CGST & Central Excise Balasore-1 Range
At: White House Lane
Balasore – 756 001.
3. Superintendent
Jajpur Audit Circle, GST &
Central Excise Audit Commissionerate
At: The Principal Commissioner (Audit)
W.P.(C) No.34660 of 2025 Page 1 of 14
Central GST & Cx, Central Revenue Building
Rajaswa Vihar
Bhubaneswar – 751 007
Odisha. … Opposite parties.
Counsel appeared for the parties:
For the Petitioner : Ms. Kajal Sahoo,
M/s. Ronit Ghosh, Subhajeet Sahu,
Urmila Sahoo, Romeet Panigtrahi,
Deepshikha Mallik, Advocates.
For the Opposite parties : Avinash Kedia,
Junior Standing Counsel
(CGST, CEx & Customs)
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDONAND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMANDate of Hearing : 30.06.2026 :: Date of Order : 15.07.2026
O RDER
Questioning the legality, rationality and propriety of
Order dated 29.09.2025 passed by the Additional
Commissioner, GST (Appeal) under Section 107 of the
Central Goods and Services Tax Act, 2017/the Odisha
Goods and Services Tax Act, 2017 (collectively be
referred to as “GST Act”, for convenience) refusing to
interfere in the challenge as to authority and rationalityW.P.(C) No.34660 of 2025 Page 2 of 14
in levying interest and imposition of penalty thereon
while undertaking adjudication process under Section
73 of the GST Act pertaining Financial Year 2017-18 by
the Superintendent, CGST & Central Excise, Balasore-I
Range, Balasore vide Order dated 15.12.2023, the
petitioner has come up before this Court invoking
extraordinary jurisdiction under Articles 226 and 227 of
the Constitution of India for grant of following relief(s):
“Under the aforesaid circumstances it is prayed that this
Hon‟ble Court may be graciously pleased to:
(a) Admit the writ application;
(b) Issue rule nisi calling upon the 0pp. Party No. 1 as to
why order dated 29.09.2025 purportedly passed
under Section 107 of the OGST/CGST Act vide
Annexure-4 contrary to provisions of the
OGST/CGST Act shall not be quashed being illegal,
arbitrary, without jurisdiction and in violation of
natural justice and unsustainable in law;
(c) To refund the pre-deposit of Rs.18,710/- paid during
the filing of Appeal which is in contravention to the
provisions of Section l07(6)(b) of the CGST/OGST
Act, 2017 in the end of justice:
(d) If the opposite party do not show cause or shows
insufficient cause make the rule absolute;
(e) To issue writ in the nature of mandamus or any
other appropriate writ directing the opposite parties
to quash Order dated 29.09.2025 passed by the
opposite party No.1 vide Annexure-4 in the end of
justice;
W.P.(C) No.34660 of 2025 Page 3 of 14
(f) To pass such order/orders, direction/directions,
writ/writs as may be deemed fit and proper in the
circumstances of the case;
(g) To allow the writ petition;
And for this act of kindness the petitioner shall as in duty
bound and ever pray.”
2. The petitioner, a company carrying on its business being
assigned with registration under the GST Act, in an
audit under Section 65 read with Rule 101 of the Central
Goods and Services Tax Rules, 2017/the Odisha Goods
and Services Tax Rules, 2017 (collectively, „GST Rules”)
found to have availed input tax credit to the tune of
Rs.6,08,455/- with respect to supply of exempted goods
during the Financial Year 2017-18. The petitioner
reversed an amount of Rs.1,77,136/- on 15.01.2020
through DRC-03 and rest amount out of total sum of
Rs.6,08,455/- was reversed in the return vide GSTR-3B
filed in respect of tax period October, 2019.
2.1. The audit pointed out that the petitioner is liable to pay
an amount of Rs.1,87,093/- towards interest for delayed
reversal of amount of input tax credit with penal
consequences to be adjudicated upon under Section 73
of the GST Act. Accordingly a show cause notice being
issued on 28.04.2023, the petitioner participating before
the authority concerned explained that the objection
raised in the audit is untenable and is liable to be
dropped. Notwithstanding such explanation of the
W.P.(C) No.34660 of 2025 Page 4 of 14
petitioner, the Adjudicating Authority proceeded to raise
demand towards penalty of Rs.60,845/- besides interest
for an amount of Rs.1,87,093/-.
2.2. The petitioner filed appeal under Section 107 of the GST
Act which came to be dismissed by Order dated
29.09.2025.
2.3. Said Order of the Appellate Authority affirming the Order
of the Adjudicating Authority is subject-matter of
challenge in the present writ application.
3. Ms. Kajal Sahoo, learned Advocate representing the
petitioner, submitted that the erroneous perception of
the authorities concerned has compelled the petitioner
to circumvent the alternative remedial forum and
approach this Court invoking Article 226 of the
Constitution of India inasmuch as it is only when the
registered person avails and utilises the input tax credit
which is found to have been erroneously claimed interest
under Section 50(3) of the GST Act would attract. It is
further submitted that in view of subsequent
amendment carried in the GST Act by way of insertion of
Section 128A, the interest and the penalty demanded in
the adjudication process under Section 73 relating to
Financial Year 2017-18 has been waived.
3.1. Referring to certain decisions Ms. Kajal Sahoo, learned
Advocate strenuously argued that the Appellate
W.P.(C) No.34660 of 2025 Page 5 of 14
Authority failed to address the issue raised by the
petitioner before him and upon erroneous reading of
provisions of the statute ignored to appreciate that if a
taxable person has allegedly delayed in filing his return,
but discharges the liability of only tax on his own
ascertainment and does not discharge the liability of
interest, the only recourse available for the Proper
Officer would be to initiate proceedings under Section
73(1) of the GST Act for recovery of the amount of “short
paid” or “not paid” interest on the tax amount. Contrary
to mandate of statute and interpretation on the point set
forth by various Courts, the Appellate Authority having
dismissed the appeal the order impugned would be
amenable to judicial review under Article 226 of the
Constitution of India in view of parameters for
entertainment of writ petition laid down in Larsen and
Toubro Ltd. Vrs. State of Odisha, (1998) 111 STC 75 (Ori);
and Sonik Electrochem (P) Ltd. Vrs. State of Orissa, (1994)
92 STC 117 (Ori).
3.2. Laying stress upon the discussion made in Hindustan
Steel Ltd. Vrs. State of Odisha, (1970) 25 STC 211 (SC)
and Commissioner of Sales Tax Vrs. Sanjiv Fabrics,
(2010) 35 VST 1 (SC) Ms. Kajal Sahoo, learned Advocate
would submit that since the petitioner, upon being
pointed out during the course of audit, voluntarily took
steps to restore the input tax credit, the imposition of
penalty is liable to be struck off.
W.P.(C) No.34660 of 2025 Page 6 of 14
4. Sri Avinash Kedia, learned Junior Standing Counsel
appearing for the opposite parties raising strong
objection against entertainment of writ petition in view of
Commissioner of Income Tax Vrs. Chhabil Dass Agarwal,
(2014) 1 SCC 603, Southern Electricity Supply Co. of
Orissa Ltd. Vrs. Sri Seetaram Rice Mill, (2012) 2 SCC 108;
Maharashtra Chess Association Vrs. Union of India,
(2020) 13 SCC 285 would submit that if the exercise of
jurisdiction by the Appellate Authority ex facie appears
to be in futility, then this Court would be justified to
interfere with the order of the statutory authority under
Article 226, but whereas in the present case the
petitioner has efficacious alternative remedy available
and unless it exhausts such remedy, this Court may not
entertain this writ petition to consider the factual
dispute set out whether there was wrong availment of
input tax credit so that provisions of Section 50(3) of the
GST Act would attract coupled with imposition of
penalty. It is, therefore, submitted that once the
petitioner has chosen to approach the Appellate Forum
provided under the GST Act, the recourse to alternative
remedy provided under the statute to maintain further
proceeding therein should be availed of; not otherwise.
5. Heard arguments advanced by the learned counsel
appearing for the respective parties and given our
anxious consideration to the contentions raised by both
the sides. This Court is convinced that disputed
W.P.(C) No.34660 of 2025 Page 7 of 14
question of fact is to be settled by the fact-finding
authorities in terms of provisions of the GST Act. The
wrong claim of input tax credit stated to have been
restored by way of disclosing in DRC-03 and Form
GSTR-3B is required to be verified and examined by the
authorities empowered under the said statute. We have
no occasion to verify such documents as the same are
not made part of writ petition. Such factual position as
claimed by the petitioner is also subject to thorough
examination with reference to the books of account vis-a-
vis evidence available on record and/or demonstrated by
the petitioner by adducing such evidence as it may think
proper.
6. Though this Court is persuaded to consider that the GST
Appellate Tribunal can adjudicate the correctness of
demand raised by levying interest and legal justification
to impose penalty by instituting proceeding under
Section 73 of the GST Act, another significant fact which
brought to the notice by the learned counsel for the
petitioner is that relegating it to prefer appeal under
Section 112 of the GST Act would tantamount to
discharge the obligation which is contrary to statutory
requirement.
6.1. Elaborating her argument, Ms. Kajal Sahoo, learned
Advocate submitted that the Appellate Authority having
not rectified the defective recording of figures in the
W.P.(C) No.34660 of 2025 Page 8 of 14
Order-in-Original the petitioner is obligated to make
further deposit in terms of Section 112(8)1 of the GST
Act for filing of appeal before the GST Appellate Tribunal.
6.2. The Show Cause Notice dated 28.04.2023 (Annexure-1)
reveals that:
“However, the noticee the reversed ITC of Rs.1,77,136
(IGST) out of total ineligible ITC of Rs.6,08.455/- vide
Form DRC-03 Debit entry No. DC2101200032828 dated
15.01.2020 and the remaining ITC of Rs.4,31,319/- is
stated to have been reversed in Form GSTR-3B for the tax
period October, 2019. In this regard, a copy of Letter
No.MEL/GST/21-22/07, dated 26th April, 2021 is
enclosed as Annexure-I. The notice thus, is required to
pay interest for late reversal of such credit under Section
50(1) of the CGST Act, 2017 read with Section 20(xxv) of
the GST Act, 2017.”
6.3. The Order-in-Original, dated 15.12.2023 was passed by
the Superintendent, CGST & Central Excise, Balasore-I
Range, Balasore with the following order:
“9.0. In view of the above discussion and findings, I pass
the following order:
Order
1 Sub-section (8) of Section 112 of the GST Act reads thus:
“(8) No appeal shall be filed under sub-section (1), unless the appellant has
paid–
(a) in full, such part of the amount of tax, interest, fine, fee and penalty
arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute, in
addition to the amount paid under sub-section (6) of Section 107, arising
from the said order, subject to a maximum of twenty crore rupees, in
relation to which the appeal has been filed.”
W.P.(C) No.34660 of 2025 Page 9 of 14
(i) I charge and order for recovery of interest of
Rs1,87,093/- (Rupees One Lakh Eighty-Seven
Thousand Ninety-three Only) (IGST: Rs.1,87,093/-)
for the F.Y. 2017-18, in terms of Section 73(9) read
with Section 50 of the CGST/OGST Act, 2017 read
with Section 20(xxv) of IGST Act, 2017.
(ii) Since the said noticee voluntarily paid/reversed
Rs.4,805/- (Rupees thousand eight hundred and
five) only through DRC-03 [Debit entry Sl No.
DC2106210040487 dt 29 06.2021]. I order for
appropriation of the said amount towards payment
of interest charged and confirmed at sl. No.(i) above.
(iii) I hereby impose penalty of Rs.60,845/ (Rupees
Sixty Thousand Eight Hundred Forty Five) only
being equivalent to 10% of wrongly availed ITC
(availed ITC of Rs.6,08,4S5/- (IGST head), but
subsequently reversed] whichever is higher, upon
the noticee under Section 73(9) of the CGST/OGST
Act, 2017 read with Section 20(xxv) of the IGST Act,
2017.”
6.4. It is apparent from the above that the liability of the
petitioner under Section 73 has been determined by
raising demand in respect of voluntary reversal of input
tax credit, interest and penalty. They do not involve
component of disputed tax. Nevertheless, the Form GST
DRC-07 dated 18.02.2023 reflects as follows:
Sr. Tax Turno Plac Act Tax/ Inte Pen Fee Oth Total
No. rate ver e of cess rest alty ers
(%) supp
ly
1 18 794,4 Odis IGS 187, 0.0 60,8 0.0 0.00 247,
59,53 ha T 093. 0 45.0 0 938.
9.00 00 0 00
W.P.(C) No.34660 of 2025 Page 10 of 14
6.5. Ex facie it is discernible from the above table that
amount of Rs.1,87,093/- demanded towards “Interest”
vide Form GST DRC-07 has been shown under the
heading “Tax”. It was submitted that due to such
apparent mistake in the adjudication order, which the
Appellate Authority failed to diligently perceive while
disposing of appeal under Section 107 of the GST Act,
the petitioner is put to prejudice. In order to file appeal
before the Goods and Services Tax Appellate Tribunal
assailing the Appellate Order, the petitioner is required
to make deposits in terms of Section 112(8) of the GST
Act. The deposit contemplated under said sub-section
does not encompass amount towards interest or penalty,
rather the petitioner is required to make pre-deposit
towards “remaining amount of tax in dispute”. It is
vehemently contended by Ms. Kajal Sahoo, learned
Advocate that serious prejudice would be caused if the
petitioner is relegated to approach the Goods and
Services Tax Appellate Tribunal as Sri Avinash Kedia,
learned Junior Standing Counsel expressed that there is
no provision for the Appellate Authority to recall the
Order-in-Appeal as the appeal has been rejected on
merit on 29.09.2025.
6.6. This Court perceived that if the petitioner is directed to
avail the alternative remedy available under Section 112,
justice would not be subserved. A bare perusal of Show
W.P.(C) No.34660 of 2025 Page 11 of 14
Cause Notice, Order-in-Original and the Order-in-Appeal
clearly evince that the demand of reversal of input tax
credit, interest and penalty raised in the Order-in-
Original has been confirmed in the appeal under Section
107 of the GST Act.
6.7. It is brought to the notice of this Court by the learned
Junior Standing Counsel appearing for respective parties
that during pendency of the writ petition, being filed on
27.11.2026, exercising power under Section 161 of the
GST Act, a Rectified Order-in-Original has been passed
on 28.01.2026 by the Superintendent of CGST & Central
Excise, with the following conclusion:
“In exercise of the powers conferred under Section 161 of
the CGST/OGST Act, 2017, I hereby rectify the error in
Form GST DRC-07. The demand of Rs.1,87,093/- is
hereby reclassified from the head of „Tax‟ to „Interest‟. A
summary of this rectification is being issued in Form GST
DRC-08 accordingly. The total amount remains
unchanged. The interest and penalty components shall
remain as originally adjudicated. This rectification is
issued solely to correct the head of account from „Tax‟ to
„Interest‟ as per the directions of the Hon‟ble High Court of
Orissa.2″
2 This Court vide Order dated 15.01.2026, while considering the contentions and
submissions of learned Advocate for the petitioner, directed as follows:
“It is pointed out by Ms. Kajal Sahoo, learned Advocate that the impugned order
under challenge is relating to demand pertaining to interest amounting
Rs.1,87,093/-. However, while entering the figure in Form GST DRC-07, it is
reflected as IGST.
Apparently, mistake has crept in, which needed rectification by the Department
suo motu.
At the request of Mr. Kedia, learned Junior Standing Counsel for the Department,
list this matter on 22nd January, 2026, enabling him to obtain instruction(s).”
W.P.(C) No.34660 of 2025 Page 12 of 14
6.8. Opposing entertainment of writ petition, it is submitted
by the learned Junior Standing Counsel that now that
the Adjudication Order is rectified suitably, the
petitioner can approach the Appellate Tribunal. On the
query from the Bench that the Appellate Authority is
required to modify his Order-in-Appeal by rectifying his
order suo motu in order to facilitate the petitioner to file
appeal under Section 112, he expressed inability as
period of limitation for such action by the Appellate
Authority under Section 161 has already lapsed.
6.9. Ms. Kajal Sahoo, learned Advocate argued that since the
Appellate Authority is not in a position to rectify such
mistake in tune with Rectified Order-in-Original dated
28.01.2026, attempts to file the appeal before the Goods
and Services Appellate Tribunal would be futile
inasmuch as the online system of filing of appeal would
not allow the petitioner to do so without pre-deposit
(percentage of remaining amount of tax) being made
under sub-section (8) of Section 112 of the GST Act. If
the petitioner is directed to avail remedy of appeal, then
it would be mandatory requirement to deposit ten
percent of “interest” component which is wrongly
affirmed in the Appeal as if it is forming part of “Tax”.
Learned Junior Standing Counsel has conceded to such
submission.
W.P.(C) No.34660 of 2025 Page 13 of 14
6.10. Faced with such situation, this Court is, therefore,
inclined to interfere with the Order-in-Appeal dated
29.09.2025 passed by the Additional Commissioner of
GST (Appeal) in Appeal bearing No.391/BBSR-
GST/APPEAL/2024.
7. Under the above premises, the Order-in-Appeal dated
29.09.2025 passed by the Additional Commissioner of
GST (Appeal) in Appeal bearing No.391/BBSR-
GST/APPEAL/2024 is set aside and the matter is
remitted to the Appellate Authority for deciding the
appeal on merit afresh without being swayed away by
earlier order and pass appropriate order in accordance
with law after hearing the petitioner.
8. In the result, the writ petition including pending
Interlocutory Application(s), if any, stands disposed of.
(HARISH TANDON)
CHIEF JUSTICE
(MURAHARI SRI RAMAN)
JUDGE
Signature Not
Verified
Digitally Signed
Signed by: ASWINI KUMAR
SETHY
Designation: Personal
Assistant (Secretary in High Court of Orissa, Cuttack
charge)
Reason: Authentication The 15th July, 2026//Aswini/Laxmikant
Location: ORISSA HIGH
COURT, CUTTACK
Date: 15-Jul-2026 16:38:17
W.P.(C) No.34660 of 2025 Page 14 of 14
