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2021 (10) TMI 524 - HC - GSTManner of pre-deposit - To be made in cash or by debiting the electronic credit ledger (ECRL)/ ITC - It is in the nature of Output Tax or not - petitioner made payment of pre-deposit being 10% of the disputed amount under the IGST, CGST and SGST by debiting its electronic credit ledger (ECRL) and did not pay it from the electronic cash ledger (ECL) - HELD THAT - It is not possible to accept the plea of the Petitioner that Output Tax , as defined under Section 2(82) of the OGST Act could be equated to the pre-deposit required to be made in terms of Section 107 (6) of the OGST Act. Further, as rightly pointed out by Mr. Mishra, learned ASC, the proviso to Section 41 (2) of the OGST Act limits the usage to which the ECRL could be utilised. It cannot be debited for making payment of pre-deposit at the time of filing of the appeal in terms of Section 107 (6) of the OGST Act. The Court is unable to find any error having been committed by the appellate authority in rejecting the Petitioner s contention that the ECRL could be debited for the purposes of making the payment of pre-deposit. The Court is of the view that the prayer of the Petitioner that the debiting of the ECRL made by it should be reversed is a separate cause of action for which the Petitioner should independently seek appropriate remedies in accordance with law. The making of the pre-deposit by the Petitioner is not contingent upon the above reversal of the debit entry in the ECRL. The Court finds no merit in these writ petitions - Petition dismissed.
Issues:
Challenge to orders rejecting appeal due to incorrect payment method. Analysis: The judgment involves five writ petitions challenging orders rejecting appeals due to incorrect payment method under the Odisha Goods and Services Tax Act, 2017. The Petitioner, a partnership firm, filed appeals against demands raised by the Deputy Commissioner resulting in extra demands for IGST, CGST, and OGST. The appeals were rejected as the Petitioner made the pre-deposit by debiting its electronic credit ledger (ECRL) instead of the electronic cash ledger (ECL) as required by Section 49(3) of the OGST Act read with Rule 85(4) of the OGST Rules. The Department issued show cause notices, leading to these petitions. The main contention of the Petitioner was that the pre-deposit could be made by debiting the ECRL based on a collective reading of relevant rules. The Petitioner argued that since the payment was a percentage of the output tax, it could be paid from the ECRL. However, the Department argued that Section 49(3) mandates payment from the ECL, and the proviso to Section 41(2) limits the usage of ECRL. The appellate authority cited legal precedents emphasizing strict compliance with statutory provisions for payment methods. The Court rejected the Petitioner's arguments, stating that the pre-deposit could not be equated to output tax and ECRL could not be used for pre-deposit payment. The Court also dismissed the reference to a Gujarat High Court judgment as not applicable to the present case. The Court found no error in the appellate authority's decision to reject the Petitioner's contentions regarding the payment method. Regarding the Petitioner's request to reverse the debit entry in the ECRL, the Court held that it was a separate issue requiring independent legal action. The Court ultimately found no merit in the writ petitions and dismissed them without costs. The judgment highlights the importance of strict adherence to statutory provisions in tax matters and the limitations on utilizing electronic ledgers for specific payments.
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