Payment of Pre- Deposit can be made by Utilizing Electronic Credit Ledger: Gujarat HC [Read Order]

A Division Bench of the Gujarat High Court reiterated that the payment of pre- deposit can be made by utilizing electronic credit ledger.

The Assistant Commissioner, CGST and Central Excise, Division – I, Surat has issued corrigendum raising the valuation of the goods held at premise 2/3713, Navsari Bazar to Rs.50,38,400/- from Rs.49,07,735/- and thereby, raised evasion of tax to Rs.9,06,912/- from Rs.8,83,392/-.

The appeal came to be disposed of vide order by the Additional Commissioner relying upon the judgement of the High Court of Orissa in the matter of M/s. Jyoti Construction vs. Deputy Commissioner of CT and GST, Jaipur. In the said decision, the High Court of Orissa held that the Electronic Credit Ledger cannot be used to give the pre-deposit for the purpose of filing an appeal under the GST and the payment for the pre-deposit must be done through Electronic Credit Ledger only.

The advocate for the petitioner pointed out that vide circular dated 6th July 2022 issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Ministry of Finance, Government of India, it has been clarified that payment of pre-deposit can be made by utilizing the Electronic Credit Ledger (ECL).

A Division Bench of Justices Bhargav D Karia and Niral R Mehta observed that “Keeping in mind the ratio laid down by the Bombay High Court in the case of Oasis Realty (supra) as well as the circular dated 6th July 2022 issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Ministry of Finance, Government of India, it has been clarified that the payment of predeposit can be made by utilizing the Electronic Credit Ledger (ECL).”

“In view of the aforesaid, we hold that the petitioner may utilize the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under sub-section (6) of Section 107 of the CGST Act. Accordingly, the impugned order-in-appeal passed by the respondent No.2 is hereby quashed and set aside. The appeal is restored to file on the undertaking of the petitioner that it shall debit the Electronic Credit Ledger within two weeks of this order getting uploaded towards this 10% payable under Section 107(6) (b), if not already debited, is accepted” the Court noted.

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