Pre-deposit of 10% of disputed tax can be paid from credit available in Electronic Credit Ledger: Bombay HC

Case Details: Oasis Realty v. Union of India - [2022] 143 taxmann.com 5 (Bombay)

Judiciary and Counsel Details

• • K.R. Shriram & A.A. Doctor, JJ.
  • Prakash Shah, Jas Sanghavi, Mihir Mehta, Yash Prakash, Rahul C. Thakar, C.B. Thakar, Vishal Agrawal, Akshit Malhotra, Ms Hima Doshi & Prabhakar K. Shetty for the Petitioner.
  • Ms Jyoti Chavan, Jitendra B. Mishra & Ms Sangeeta Yadav for the Respondent.

Facts of the Case

Section 107 of CGST Act, 2017 requires mandatory pre-deposit before filing of appeal. According to Revenue, the appellant can utilise the credit available only in the Electronic Cash Ledger. The question before the High Court was whether a taxpayer can pay the amount of pre-deposit of 10% of disputed tax amount by utilising the credit available in the Electronic Credit Ledger.

High Court Held

The Honorable High Court noted that as per CBIC Circular F. No.CBIC-20001/2/2022-GST dated 6th July 2022, any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registered person.

Since, the CBIC has already clarified that credit ledger can be used for payment of output tax payable under any proceedings, therefore it was held that the pre-deposit of 10% of disputed tax can be paid from credit available in Electronic Credit Ledger.