The Allahabad High Court ruled that once the amount deposited under protest was not adjusted till date by the Revenue authorities, then such a deposit can be availed by the trader towards the adjustment / pre-deposit of 10 % of the amount for the entertainment of his appeal as required under Section 107 (6) of the GST Act.
Reference was made to the Circular No. 172/04/2022-GST issued by the GST department, which clearly provides for the utilization of the amount for the electronic credit ledger by the registered person for payment of any tax under the GST law.
A Single Judge Bench of Justice Piyush Agrawal observed that once the amount being deposited by the registered trader under protest has not been quantified from any of the demands imposed pursuant to the proceedings under Section 74 of the GST Act, 2017, the trader can take advantage of the said amount towards the mandatory pre-deposit requirement under Section 107(6) of the GST Act for filing of appeals.
The Single Judge found that the total disputed tax liability for the concerned tax period was Rs. 7.06 crores and the pre-deposit amount for entertaining the appeals would be Rs. 70.66 lacs, whereas the petitioner has already deposited Rs. 1.40 crores under protest and the said amount has not been adjusted from the amount of pre-deposit as required under the GST Act.
Briefly, in this case, the business premises of the petitioner, engaged in the manufacturing and trading of dairy products, were surveyed, and purchases made by the petitioner from Darsh Dairy were resumed. Later, upon coercion by the DGGSTI officers, the petitioner deposited a sum of Rs. 1.40 crores under protest in the absence of any adjudicated tax liability. Thereafter, proceedings under Section 74 of the CGST Act were initiated, which, though challenged, were dismissed as not maintainable on the ground that the petitioner had failed to bring on record any evidence of pre-deposit of the mandatory requirement of 10 % as required under Section 107 (6) of the CGST Act.
The petitioner therefore approached the High Court and claimed that once the deposit of Rs. 1.40 crores under protest is still lying with the revenue, the petitioner was not required to deposit any further amount, and referred to Circular No. 172/04/2022-GST issued by the GST department, where it was clarified that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding, can be utilized by the amount available in the electronic credit ledger of a registered person.
Circular/ Notifications Relied:
Circular No. 172/04/2022-GST dated July 06, 2022
Cases Relied On:
Yasho Industries Ltd. Vs. Union of India – (2024) 24 Centax 338 (GUJ)
VVF (India) Ltd. Vs. State of Maharashtra – (2023) 4 Centax 421 (SC)
Appearances:
Advocates Nishant Mishra and Shivangi Singh, for the Petitioner/ Taxpayer
CSC, for the Respondent/ Revenue
