The Patna High Court, in a significant move, has held the Goods and Services Tax (GST) appeal filed by payment of 10% pre-deposit from Electronic Credit Ledger (ECRL) maintainable.
In the present case, the petitioner paid the ten per cent amount from the Electronic Credit Ledger. The Appellate Authority by order dated 10.01.2023 rejected the appeal on the ground that the ten per cent has to be paid from the Electronic Cash Ledger.
Archana Sinha, Advocate, appeared for the petitioner and AG P K Shahi along with SC Vikash Kumar appeared for the state/respondents.
The said position has been accepted after going into the various provisions of the Goods and Services Tax Act, 2017 by a Division Bench of the Patna High Court in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors. on 19.09.2023.
However, observations in Paragraphs 77 and 78 of the said judgment have been stayed on 04.12.2023 by the Supreme Court in Special Leave to Appeal (C) No. 25437 of 2023.
It was also noted 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 percent of the amounts pending and due to be paid to the Department as against the 10 percent prescribed by the statute.
The Bench noted that, 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 percent of the 12.5 percent 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”, the Division Bench of Chief Justice K Vinod Chandran and Justice Rajiv Roy observed.
The bench noted that the Supreme Court has stayed the Division Bench judgment and in such circumstances, especially since consideration of the appeal on merits is the question raised before us, we are of the opinion that pending decision of the Supreme Court, the appeal should be considered on merits.
Earlier this month, the Supreme Court has issued a stay to the rejection of appeals by Patna High Court as non-maintainable for payment of Pre-Deposit for Goods and Services Tax (GST) appeal from Electronic Credit Ledger (ECRL) instead of Electronic Cash Ledger (ECL).
Read More: Interim Relief to Flipkart: Supreme Court stays Patna HC’s Rejection of GST Appeal for Pre-Deposit from ECRL instead of ECL, issues Notice
The Patna High Court, in result, set aside the order in appeal dated 10.01.2023 and directed the appeal to be considered on merits.
It was further made clear that the Commissioner, Commercial Taxes, Patna shall issue necessary directions for consideration of appeals when the subject matter is pending before the Supreme Court. There shall be no insistence for payment of the 10 percent due and payable under Section 107 of the GST Act, from the Electronic Cash Ledger.
It was also noted 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.”
Hence the writ petition was allowed, with the above directions.
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