LI Network
Published on: December 29, 2023 at 12:14 IST
The Patna High Court has declared that the Revenue Department does not possess the authority to compel appellants to make a complete pre-deposit when filing an appeal under the Amnesty Scheme using the Electronic Cash Ledger.
The pivotal issue addressed in the writ petition centered around whether, upon initiating an appeal, ten percent of the outstanding amounts should be drawn from the Electronic Cash Ledger or the Electronic Credit Ledger.
M/s. Friends Mobile (“the Petitioner”) adhered to the amnesty scheme’s requirements and made a payment of ten percent from the Electronic Credit Ledger. However, the Revenue Department, through an order dated 10.01.2023, rejected the appeal on the grounds that the ten percent must be paid from the Electronic Cash Ledger.
Challenging this decision, the Petitioner filed a Civil Writ Petition before the Patna High Court.
The Court underscored that its position was established after a thorough examination of various provisions of the Goods and Services Tax Act, 2017, as elucidated by a Division Bench of the court in the case of M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors.
However, the Court noted that the Supreme Court, in Special Leave to Appeal (C) No. 25437 of 2023, issued a stay on the observations made in Paragraphs 77 and 78 of the said judgment on December 4, 2023.
Considering Notification No. 53/2023 dated November 2, 2023, issued by the Ministry of Finance, the court acknowledged its relevance. This notification permitted the filing of delayed appeals beyond the stipulated period under Section 107 of the GST Act, requiring a payment of 12.5% of the outstanding amounts, as opposed to the 10% specified by the statute.
The Court highlighted that the notification specifically mentioned that at least 20 per cent of the 12.5 per cent remaining due and payable should be paid from the Electronic Cash Ledger. Consequently, the Court emphasized that even the GST Council recognized the ten percent as eligible for payment through the Electronic Credit Ledger.
While acknowledging the Division Bench judgment, the court noted the stay granted by the Supreme Court and expressed the view that, pending the Supreme Court’s decision on the appeal’s merits, it should be considered on its substantive grounds. The court set aside the order in appeal and directed its reconsideration on merits.
The Court explicitly stated that the Commissioner, Commercial Taxes, Patna, should issue necessary directives for considering appeals when the subject matter is pending before the Supreme Court, without insisting on the payment of the 10 percent from the Electronic Cash Ledger.
The Court, recognizing that ten percent of the amount remaining due and payable had already been remitted from the Electronic Credit Ledger, deemed the appeal maintainable and directed the Appellate Authority to assess it on its substantive merits.
Case Title: M/s Friends Mobile vs The State of Bihar & Ors