Facts of the Case: In this case, the petitioner was under voluntary liquidation as per NCLT order and was represented by its liquidator. The GST department initiated proceedings by issuing a notice in Form GST ASMT-10 pointing out discrepancies in returns, followed by Form GST DRC-01A and a SCN. The petitioner filed replies, however, respondent confirmed a demand under Section 73(1) of the CGST/TNGST Act for the period April 2019 to December 2019, along with interest under Section 50(1) and penalty. The petitioner’s GST registration had been cancelled on 30.12.2019 and a fresh registration obtained on 14.08.2020.
Between February 2019 and April 2020, the petitioner had deposited some amount into the Electronic Cash Ledger through challans contemporaneously with the tax liability.
The department, however, refused to adjust these deposits towards the tax dues, contending that payment occurs only when the ledger is debited through filing of GSTR-3B, which could not be done as the registration stood cancelled.
The petitioner argued that such deposits are already credited to the Government account upon payment under Section 49 CGST Act, relied upon CBIC Circular No.134/04/2020-GST dated 23.03.2020 recognising such payments during liquidation, and pointed out that the NCLT had earlier restricted the department’s claim to amounts as on 06.08.2018, which order had attained finality.
Issue: Whether amounts deposited into the Electronic Cash Ledger during liquidation, but not debited through GSTR-3B due to cancellation of registration and technical restrictions, can be treated as payment of GST and appropriated towards tax dues for the relevant period.
Held that: The Court observed that there was no dispute that the petitioner had deposited the amounts contemporaneously with tax liability for the disputed period.
The inability to debit the ledger and file returns was due to procedural/technical restrictions, not deliberate default. Under Section 49 CGST Act, cash ledger deposits are akin to Government receipts from the moment of deposit.
Further, Circular No.134/04/2020-GST recognises such deposits during liquidation and provides for refund, implying legislative acceptance of such payments. Rigid procedural interpretation would cause unjust enrichment to the Revenue despite tax already being paid.
Since NCLT’s earlier order attained finality, the Department could not re-agitate claims independently; action is also barred by res judicata. The Court quashed the order and directed department to appropriate amounts already deposited in Electronic Cash Ledger towards petitioner’s tax dues.
Case Name: SATYADEVI ALAMURI vs. OFFICE OF ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE dated 28.07.2025
To read the complete judgment 2025 Taxo.online 1754
