Pre-deposit for filing appeal through electronic credit ledger under GST is not allowed- Orissa High Court
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Case Details: |
Jyoti Construction vs. Deputy Commissioner of CT & GST, Jajpur |
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Appeal No.: |
W.P.(C) Nos. 23508, 23511, 3513, 23514 and 23521 of 2021 |
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Order pronounced by: |
Orissa High Court |
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Date of Order: |
07-10-2021 |
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In favour of: |
Revenue |
Source: Orissa High Court Judgements
Brief Facts:
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The petitioner is a partnership firm engaged in the business of execution of works contract including civil, electrical, and mechanical. A demand was raised by the Deputy Commissioner of CT & GST, Jajpur for IGST, CGST, and OGST inclusive of interest. An appeal was filed by the petitioner in the electronic form against the demand order before the appellate authority. In terms of Section 107(6) of the OGST Act, the petitioner was required to pre-deposit an amount equal to 10% of the disputed tax arising from the order against which the appeal is filed. This payment was required to be made by the Petitioner by debiting its electronic cash ledger as per section 49(3) read with Rule 85(4) of the OGST Rules. However, the Petitioner sought to make payment of the pre-deposit by debiting the electronic credit ledger. |
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The contention of the Petitioner before the appellate authority as well as before the Hon’ble High Court is that under Section 49(4) of the OGST Act, the amount available in the electronic credit ledger could be used for making “any payment towards output tax” under the OGST Act or the IGST Act “in such manner and subject to such conditions and within such time as may be prescribed”. |
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The counsel on behalf of the Petitioner referred to the definition of “Output Tax” under Section 2(82) of the OGST Act which means “tax chargeable under this Act on supply of goods or services or both” made by the taxable person or his agent but excludes tax payable on reverse charge basis. On this basis, it is contended that since what in effect be the Petitioner was paying was a percentage of the output tax as defined under Section 2(82) of the OGST Act, the amount could well be paid by debiting the electronic credit ledger. |
Observations & Ruling of the Court:
- It is not possible to accept the plea of the Petitioner that “Output Tax” as defined under Section 2(82) of the OGST Act could be equated to the pre-deposit required to be made in terms of Section 107(6) of the OGST Act.
- The proviso to Section 41(2) of the OGST Act limits the usage to which the electronic credit ledger could be utilized. It cannot be debited for making payment of pre-deposit at the time of filing of the appeal in terms of Section 107(6) of the OGST Act. It is not possible to accept the plea of the Petitioner that Section 107(6) of the OGST Act is merely a “machinery provision”. Therefore, the pre-deposit for appeal under GST should be paid through the cash ledger only.
Disclaimer: The above article is based upon the judgement of the Hon’ble Orissa High Court and is meant for informative purposes only. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
