No Interest Payable after GST Deposit in Electronic Cash Credit Ledger: Calcutta HC stays Recovery [Read Order]

The Calcutta High Court has granted interim relief to the taxpayer by staying recovery following the Gujarat HCdecision that one tax is deposited in the Electronic Cash Credit Ledger, no interest is payable till return filing.

The petition was filed by R.A.A. Arsalan Enterprise Pvt. Ltd. challenging a notice dated 20 November 2025. The GST department demanded ₹64.15 lakh with a threat of recovery proceedings.

The counsel of the petitioner, Adv. Talay Massod Siddiqui contended that it had already deposited ₹56.35 lakh towards interest under Section 50 ofthe CGST Act read with Rule 88B of the CGST Rules, and therefore no further interest liability could be demanded.

The Gujarat HC decision in the Arya Cotton Industries and another Vs. Union of India was quoted by the counsel. It was submitted in the Gujarat High Court ruling, it was held that “tax amount which has already been credited to the Government by depositing in electronic cash credit ledger is required to be considered as a payment of tax which gets adjusted at the time of filing of return and, therefore, question of payment of interest would not arise in such cases for the period from the date of deposit of the amount in the electronic cash credit ledger till the date of filing of the return.”

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The GST department’s counsel stood on the demand itself and submitted that the petitioner is liable to pay tax.

The court, after hearing the matter observed that the petitioner has made out a prima facie case requiring interim protection. Therefore Justice Om Narayan Rai restrained the department from the recovering proceedings after noting that the petitioner had paid the interest till January 15, 2026.

The matter was listed for further consideration.

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