Entire amount of pre-deposit not to be paid from Electronic Cash Ledger for filing appeal under Amnesty Scheme

[CA Bimal Jain]

The Hon’ble Patna High Court in M/S FRIENDS MOBILE VERSUS THE STATE OF BIHAR THROUGH THE COMMISSIONER OF COMMERCIAL STATE TAXES, NEW SECRETARIAT, PATNA, ASSISTANT COMMISSIONER, STATE TAXES, PATNA EAST, PATNA, BIHAR, ADDITIONAL COMMISSIONER, STATE TAXES, PATNA EAST, PATNA, BIHAR - 2023 (12) TMI 469 - PATNA HIGH COURT allowed the Writ Petition and held that Revenue Department cannot direct the Appellant to pay the entire amount of pre-deposit for filing appeal from Electronic Cash Ledger under the Amnesty Scheme.

Facts:

M/s. Friends Mobile (“the Petitioner”) made a payment of ten percent from the Electronic Credit Ledger as required under the amnesty scheme introduced by the Revenue Department (“the Respondent”) for filing appeal. However, the Respondent Appellate Authority, vide order dated January 10, 2023 (“the Impugned Order”)  rejected the appeal, asserting that the ten percent must be paid from the Electronic Cash Ledger.

Aggrieved by the Impugned Order, the Petitioner filed Civil Writ Petition before the Hon’ble Patna High Court.

Issue:

Whether Entire amount of pre-deposit has to be paid from Electronic Cash Ledger for filing appeal under Amnesty Scheme?

Held:

The Hon’ble Patna High Court in M/S FRIENDS MOBILE VERSUS THE STATE OF BIHAR THROUGH THE COMMISSIONER OF COMMERCIAL STATE TAXES, NEW SECRETARIAT, PATNA, ASSISTANT COMMISSIONER, STATE TAXES, PATNA EAST, PATNA, BIHAR, ADDITIONAL COMMISSIONER, STATE TAXES, PATNA EAST, PATNA, BIHAR - 2023 (12) TMI 469 - PATNA HIGH COURT held as under:

• Observed that Notification No. 53/2023 dated November 2, 2023 (“the Notification”) issued by the Respondent, allowed the filing of delayed appeals beyond the period specified in Section 107 of the Central Goods and Service Tax Act, 2017 (“CGST Act, 2017”). The Notification mandates the payment of 12.5 percent of the pending amounts to the Department, as opposed to the 10 percent prescribed under the CGST Act. The notification further states that at least 20 percent of the remaining 12.5 percent should be paid from the Electronic Cash Ledger.
• Further Observed that, the Division Bench of the Court in the case of M/S FLIPKART INTERNET PVT. LTD. VERSUS THE STATE OF BIHAR, THE ADDITIONAL COMMISSIONER OF STATE TAX (APPEAL) , THE JOINT COMMISSIONER OF STATE TAX, THE UNION OF INDIA AND M/S SANYOG CONSTRUCTION PRIVATE LIMITED VERSUS THE STATE OF BIHAR, THE PRINCIPAL SECRETARY CUM COMMISSIONER, THE DEPUTY COMMISSIONER OF STATE TAXES, NORTH CIRCLE, PATNA, THE ADDITIONAL COMMISSIONER OF STATE TAXES AND SUMMIT DIGITAL INFRASTRUCTURE LIMITED VERSUS THE STATE OF BIHAR, THE DEPUTY COMMISSIONER, STATE TAX, DANAPUR, THE ADDITIONAL COMMISSIONER STATE TAX (APPEALS) , THE JOINT COMMISSIONER OF STATE TAX, HDFC BANK LTD., THE UNION OF INDIA - 2023 (12) TMI 419 - PATNA HIGH COURT wherein it was held that pre-deposit amount of remaining 10 percent under Amnesty scheme as per Notification has to be paid from Electronic Cash Ledger. However, certain observations made in para 77 and 78 of that judgment pertaining to aforementioned points were stayed by the Hon’ble Supreme Court in the case of M/S FLIPKART INTERNET PVT. LTD. VERSUS THE STATE OF BIHAR & ORS. -2023 (12) TMI 425 - SC ORDER .

• Noted that, the Notification clearly implies a recognition by the GST Council that the ten percent could be paid through the Electronic Credit Ledger.

• Opined that, during the pendency of the aforementioned appeal pending before the Hon’ble Supreme Court the appeal should be decided on merits.
• Held that , the Impugned Order is set aside and as the amount of 10 percent is already deposited by the Petitioner from Electronic Credit Ledger, therefore, the Appeal filed is maintainable. Hence, the Writ Petition is allowed.
• Directed that, the Appeal should be considered on merits and no insistence should be made by the Respondent Commissioner (Appeals) for payment of 10 percent amount as pre-deposit from Electronic Cash Ledger.

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