GST / Indirect Tax : Effect of Challenging an Order by Tax Department in Higher Courts

GST / Indirect Tax : Effect of Challenging an Order by Tax Department in Higher Courts

It has been held in Opasil Pigments and Chemicals (P) Ltd v State of UP [2025] GCtR 1574 (Allahabad) that S. 161 of UPGST Act, 2017 cannot be used as a mechanism for recalling the order of appeal, which has been decided on its own merit in favour of the assessee. The rectification of error apparent on the face of record must be reflected at a glance.

The record showed that the order allowing the appeal of the petitioner cannot be recalled merely on the basis of filing of Special Leave to Appeal before the Apex Court in which neither any interim order has been granted nor any prohibition was laid staying the proceedings for passing of the order by the appellate Court, which is a statutory remedy provided under the Act.

In this case, the goods of the applicant were seized and for release of the same, order under Section 129 (1) of UP GST / CGST Act was passed against which Writ Tax No. 865 of 2019 was filed in which an interim order dated 1.8.2019 has been passed directing the seizing authority to release the goods of the petitioner along with vehicle forthwith subject to deposit of security other than cash or bank guarantee or in alternative accept an indemnity bond, equal to the value of tax and penalty to the satisfaction of seizing authority. 

However the Department instead of complying the said order insisted to deposit of security against which Contempt Application (Civil) No. 5428 of 2019 was filed in which no interim order was passed. In the meantime, the petitioner has filed an appeal under Section 107 before the appellate authority, which was allowed vide order dated 8.2.2020 on its merit. Thereafter respondent no. 3 moved an application to which the order allowing the appeal was recalled only on the basis that respondent no. 3 has filed Special Leave to Appeal No. 21569 of 2019 before the Apex Court.