Tata Play Wins Interim Relief in Entry Tax Case; High Court Orders Installment-Based Payment

The Orissa High Court granted partial relief to Tata Play Limited by staying recovery of penalty under the Orissa Entry Tax Act, 1999, subject to payment of the disputed tax and interest in instalments during the pendency of its second appeal before the Odisha Sales Tax Tribunal. A Division Bench comprising Justice Savitri Ratho and Justice V. Narasingh held that the interests of justice would be adequately protected by permitting staggered payment of tax and interest while keeping recovery of penalty in abeyance.

The dispute arose after Tata Play challenged an order of the Commissioner of Commercial Tax and GST rejecting its request for stay of demand during the pendency of a second appeal before the Odisha Sales Tax Tribunal. The demand pertained to the period from 1 April 2012 to 31 March 2014 and comprised tax, interest and penalty aggregating to Rs.66.66 lakh under the Orissa Entry Tax Act.

Before the High Court, the assessee contended that refusal to grant stay would cause serious prejudice and render the pending appeal before the Tribunal ineffective. It was argued that coercive recovery during the pendency of the appeal would defeat the very purpose of the appellate proceedings.

The Revenue, on the other hand, opposed the writ petition and submitted that the assessee had failed to establish a prima facie case warranting any interim protection. Relying upon the Commissioner’s order, the department argued that no interference was called for by the High Court.

The Court examined the demand notice and noted that the disputed demand consisted of tax, interest and penalty components. However, considering that the second appeal was already pending before the Tribunal, the Bench consciously refrained from expressing any opinion on the merits of the underlying dispute.

“Since the matter is pending before the Tribunal, this Court refrains from making any observation regarding the merits of the matter.”

After considering the rival submissions and the statutory provisions, the Court held that the ends of justice would be served if the assessee was directed to discharge the tax and interest liability in instalments. The Bench accordingly directed Tata Play to pay the tax and interest amount in three equal instalments falling due on 30 June 2026, 15 July 2026 and 30 July 2026. The Revenue authorities were also directed to consider the assessee’s claim regarding payments already made while computing the instalment amounts.

“On such deposit, the realization of penalty shall remain stayed till disposal of the second appeal by the Tribunal.”

The Court further requested the Odisha Sales Tax Tribunal to dispose of the pending second appeal expeditiously, preferably by the end of August 2026, and directed both parties to cooperate in early disposal of the matter.

Thus, the writ petition and the connected interlocutory application were disposed of with directions for payment of tax and interest in instalments and a stay on recovery of penalty till the Tribunal decides the appeal.