GST pre-deposit made through Electronic Credit Ledger is a Valid Deposit: Allahabad HC Directs Appellate Authority to Accept [Read Order]
The Gujarat High Court’s binding ruling in Yasho Industries, now upheld by the Supreme Court, states deposits made via the Electronic Credit Ledger must be treated as valid compliance with the pre-deposit condition under Section 107.
GST - predeposit - Taxscan
GST - predeposit - Taxscan
The Allahabad High Court, Lucknow Bench, has held that a pre-deposit made through the Electronic Credit Ledger (ECRL) is a valid deposit for the purpose of filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017.
The Court quashed the order of the appellate authority that had dismissed the taxpayer’s GST appeal on the ground that such deposit was not in accordance with law.
The petitioner, M/s O.C. Infraventures and Construction Pvt. Ltd., had filed an appeal against an order under the GST Act. However, the Joint Commissioner (Appeals) dismissed the appeal by order dated 22 April 2025 on the reasoning that the pre-deposit of ₹15,889/- made through the Electronic Credit Ledger could not be treated as a valid pre-deposit under Section 107(6).
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The authority also noted that the deposit amount was below the prescribed quantum, treating the GST appeal as non-maintainable.
The petitioner’s counsel relied on the Gujarat High Court’s decision in Yasho Industries Ltd. v. Union of India (2023), which held that deposits made through the ECL are valid in light of CBIC’s Circular dated 6 July 2022. Also, the Supreme Court had dismissed the Revenue’s SLP against this ruling on 19 May 2025, confirming its validity.
The Revenue, on the other hand, relied on an earlier Allahabad High Court judgment in National Fertilizers Ltd. v. Principal Commissioner, CGST and Central Excise, Lucknow, where it was observed that even if a deposit is not in accordance with law, the assessee must be confronted with the shortfall and given an opportunity to rectify it.
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Justice Pankaj Bhatia noted that the appellate authority had not provided the petitioner an opportunity to rectify the alleged error. Moreover, in view of the Gujarat High Court’s binding ruling in Yasho Industries, now upheld by the Supreme Court, deposits made via the Electronic Credit Ledger must be treated as valid compliance with the pre-deposit condition under Section 107.
It ruled that “The matter is remanded to the appellate authority with a direction to decide the appeal in accordance with law and accept the amount paid through electronic credit ledger as a valid deposit for preferring an appeal under Section 107 of the GST Act. However, if there are any shortfall of deposit in terms of the prescriptions contained in Section 107(6), the petitioner herein shall make the deposit so as to make the same within the quantum as prescribed under Section 107 (6) of the Act.
The Court held that the appellate authority’s order dismissing the appeal was unsustainable and liable to be quashed. Also the matter was remanded back to the appellate authority with a direction to decide the appeal in accordance with law and accept the amount paid through electronic credit ledger as a valid deposit for preferring an appeal under Section 107 of the GST Act.
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