2022 (9) TMI 1265 - HC - GST

Maintainability of appeal - requirement of mandatory pre-deposit - appeal rejected on the ground that the mandatory deposit should have been made from the cash ledger - HELD THAT - After hearing the counsel for the petitioner as well as learned Standing Counsel, this Court finds that pre-deposit has been made by the Firm before the Appellate Authority, and the Appellate Authority shall not insist the Firm to make deposit through electronic cash ledger and shall proceed to decide the appeal on merits strictly in accordance with law. The writ petition stands partly allowed.

Summary

Issues:
1. Interpretation of mandatory pre-deposit requirements under GST laws.
2. Rejection of appeal based on the mode of deposit (electronic credit ledger vs. cash ledger).
3. Authority's duty to decide appeals on merit despite technical non-compliance with deposit requirements.

Analysis:
1. The judgment primarily deals with the interpretation of mandatory pre-deposit requirements under the Goods and Services Tax Act, 2017. The petitioner, an Assessee Firm, had made a pre-deposit of 10% through the electronic credit ledger, which was rejected by the Additional Commissioner, Grade-2 (Appeal)-I, Commercial Tax, Jhansi. The contention was that the mandatory deposit should have been made from the cash ledger. However, the petitioner relied on a clarificatory circular issued by the Government of India, stating that payments towards output tax can be made using the electronic credit ledger of a registered person.

2. The First Appellate Authority rejected the appeal solely based on the mode of deposit, without considering the merits of the case. It was noted that the petitioner subsequently made a deposit through the cash ledger. The High Court, after hearing both parties, found that the pre-deposit had been made before the Appellate Authority. The Court directed the Authority not to insist on depositing through the electronic cash ledger and to proceed with deciding the appeal on its merits in accordance with the law.

3. Consequently, the High Court partly allowed the writ petition, setting aside the order passed by the Additional Commissioner. The First Appellate Authority was directed to decide the appeal on its merits within a specified timeframe, emphasizing the importance of adjudicating appeals based on substance rather than technical non-compliance with deposit requirements. This judgment underscores the significance of ensuring that appeals are adjudicated fairly and justly, focusing on the substance of the case rather than procedural technicalities.