Electronic Credit Ledger can’t be Debited for making Payment of Pre-Deposit: Orissa High Court [Read Order]

The Orissa High Court held that Electronic Credit Ledger (ECRL) cannot be debited for making payment of pre-deposit.

The petitioner, M/s. Jyoti Construction the challenge is to orders passed by the Additional Commissioner of Sales Tax (Appeal), Central Zone, Odisha rejecting the appeal filed by the Petitioner under Section 107 (1) of the Odisha Goods and Services Tax Act, 2017 and holding that the appeals filed are defective since the Petitioner herein had made payment of the 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) and furnished the proof of payment of the mandatory pre-deposit and that this was in contravention of Section 49(3) of the OGST Act read with Rule 85 (4) of the OGST Rules, 2017.

The Petitioner is a partnership firm engaged in the business of execution of works contracts including civil, electrical and mechanical.

Mr. Roy counsel for the petitioner contended that under Section 49 (4) of the OGST Act, the amount available in the ECRL could be used for making "any payment towards output tax” under the OGST Act or the IGST Act “in such manner and subject to such conditions and within such time as may be prescribed”. Under Rule 85 (4) of the OGST Rules, the amount deducted under Section 51, or collected under Section 52, or the amount payable on reverse charge basis, or; the amount payable under Section 10, or any amount payable towards interest, penalty, fee or “any other amount under the Act” shall be paid by debiting the ECL (i.e. the cash ledger) maintained under Rule 87 and the electronic ledger liability register (ELR) shall be credited accordingly.

The division bench headed by the Chief Justice Dr. S. Muralidhar and Justice B.P. Routray did  not 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 held 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.

To Read the full text of the Order CLICK HERE

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