Jyoti Construction – 2021 (54) G.S.T.L. 279 (High Court – Odisha)

Electronic credit ledger cannot be debited for making payment of pre-deposit for filing appeal under GST.

Facts- In this case, the petitioner is a partnership firm engaged in the business of execution of works contract, a demand was raised by the Deputy Commissioner of CT & GST, which resulted in an extra demand for IGST, CGST and OGST (Odisha GST) inclusive of interest. An appeal was filed in Form-GST APL-01 before the appellate authority under Section 62(1) of the OGST Act read with Rule 100(1) of the OGST Rules electronically.

In terms of Section 107(6) of the OGST Act, the petitioner was required to make payment equivalent to 10% of the disputed amount of tax arising from the order against which the appeal is filed. This payment was made by the petitioner by debiting its Electronic Credit Ledger (ECRL). According to the Department, this liability of pre-deposit could be discharged only by debiting the Electronic Cash Ledger (ECL) and not through ECRL. 

The Petitioner contended that under Section 49(4) of the OGST Act, the amount available in the ECRL could be used for making “any payment towards output tax” under the OGST Act. The said contention was based on the scenario 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 ECRL.

Issue: Whether the amount available in the Electronic Credit Ledger (ECRL) could be use for making payment of pre-deposit, which is required to be made for filing an appeal under Section 107(6) of the OGST Act.

Held- The Hon’ble Odisha High Court, held 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. Further, the proviso to Section 41(2) of the OGST Act limits the usage to which the ECRL could be utilised, but 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. 

 

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