2023 (12) TMI 469 - HC - GST

Maintainability of appeal - requirement of deposit - whether on filing an appeal the ten per cent of the due amounts are to be paid from the Electronic Cash Ledger or the Electronic Credit Ledger? - HELD THAT - It is noticed from Notification No. 53/2023 dated 02.11.2023 issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), which permitted filing of delayed appeals even beyond the period provided under Section 107 of the GST Act, that the stipulation was of paying an amount of 12.5 per cent of the amounts pending and due to be paid to the Department as against the 10 per cent prescribed by the statute. In the said Notification issued by the Central Government on the recommendation of the GST Council, it has been specifically stated that at least 20 per cent of the 12.5 per cent remaining due and payable should be paid from the Electronic Cash Ledger. Hence, even the GST Council understood the ten per cent to be enabled for payment through the Electronic Credit Ledger. It is pointed out that in the present case, already ten per cent of the amount remaining due and payable is remitted from the Electronic Credit Ledger which would make the appeal maintainable and the Appellate Authority shall consider it on merits. Petition allowed.

Summary

Issues involved: Interpretation of GST Act regarding payment of appeal amounts from Electronic Cash Ledger or Electronic Credit Ledger.

The High Court of Patna addressed the issue of whether ten per cent of due amounts in an appeal should be paid from the Electronic Cash Ledger or the Electronic Credit Ledger. The petitioner had paid the amount from the Electronic Credit Ledger, but the Appellate Authority rejected the appeal, stating that the payment should be made from the Electronic Cash Ledger. The Court referred to a previous Division Bench judgment in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors., which supported the payment from the Electronic Cash Ledger. However, the Supreme Court had stayed certain observations of that judgment. Additionally, a notification by the Ministry of Finance allowed delayed appeals with a payment of 12.5 per cent, with at least 20 per cent of that amount required to be paid from the Electronic Cash Ledger. The Court acknowledged the binding nature of the Division Bench judgment but decided to consider the appeal on its merits, given the stay by the Supreme Court.

Regarding the specific case, the Court set aside the Appellate Authority's order and directed a reconsideration of the appeal on its merits. The Commissioner of Commercial Taxes, Patna was instructed not to insist on the payment of ten per cent from the Electronic Cash Ledger, allowing the appeal to proceed based on the amount already paid from the Electronic Credit Ledger. Ultimately, the writ petition was allowed with the provided directions.