Order of Patna HC Denying Use of Electronic Credit Ledger for Purposes of Paying Pre-deposit to Be Stayed | SC

Case Details: Flipkart Internet (P.) Ltd. v. State of Bihar - [2023] 157 taxmann.com 166 (SC)

Judiciary and Counsel Details

• • Mrs B.V. Nagarathna & Ujjal Bhuyan, JJ.
  • Arvind Datar, Tarun Gulati, Sr. Advs., Kishore Kunal, AOR, Ms Runjhun Pare & Jayesh Sitlani, Advs. for the Petitioner.

Facts of the Case

Recently, the High Court of Patna has held that as per Section 49 of CGST Act, 2017, the amount in Electronic Credit Ledger (ECRL) cannot be utilized for purposes of paying the pre-deposit under Section 107(6) of CGST Act, 2017. The Court noted that Section 49(4) only permits for making payments towards output tax and scope of utilization of amounts in ECRL cannot be enlarged for making payment for any other purpose since the amount of pre-deposit can’t be considered as output tax.

Therefore, the Patna High Court held that no interference was required in order of Appellate Authority holding that pre-deposit can only be made through Electronic Cash ledger (ECL). The assessee filed SLP before Supreme Court against order of High Court.

Supreme Court Held

The Apex Court admitted the SLP and held that pending disposal of SLP, the observations of High Court order regarding mode of payment of pre-deposit would remain stayed. The notices were issued to the Revenue.

List of Cases Reviewed

• • Flipkart Internet (P.) Ltd. v. State of Bihar [2023] 157 taxmann.com 135 (Patna) (para 2), partly stayed.