Raiyan Traders Vs State of Bihar
Date: September 5, 2024
Subject Matter
Pre-deposit amount due for an appeal could be paid from the Electronic Credit Ledger
Summary
In the case of Raiyan Traders vs. State of Bihar, the Patna High Court deliberated on the procedural matter regarding payment requirements for filing an appeal under the GST Act. The core issue was whether 10% of the tax amount due for an appeal could be paid from the Electronic Credit Ledger rather than the required Electronic Cash Ledger. The petitioner had made the appeal payment from the Electronic Credit Ledger, which the Appellate Authority rejected, insisting that the payment must come from the Electronic Cash Ledger. This ruling of the appellate authority was supported by prior case law from Flipkart Internet Pvt. Ltd. v. State of Bihar, where a similar stance was taken. However, the Supreme Court had stayed specific observations of that judgment, influencing the current case. Notably, Notification No. 53/2023 from the Ministry of Finance permitted delayed appeals and allowed partial payments, interpreting that part of the due amount could be paid from the Credit Ledger, which the GST Council seemed to endorse. Consequently, the Patna High Court, acknowledging the stay from the Supreme Court and the context of the Notification, directed that the petitioner’s appeal be reconsidered on its merits. The court set aside the earlier rejection by the Appellate Authority because the requisite payment from the Electronic Credit Ledger had already been made, thus making the appeal maintainable. The writ petition was consequently allowed with specified directions for reassessment.
The issue raised in the above writ petition is as to whether on filing an appeal the ten per cent of the due amounts are to be paid from the Electronic Cash Ledger or the Electronic Credit Ledger.
2. In the present case, the petitioner paid the ten per cent amount from the Electronic Credit Ledger. The Appellate Authority by order dated 14.01.2023 rejected the appeal on the ground that the ten per cent has to be paid from the Electronic Cash Ledger. In fact, the said position has been accepted after going into the various provisions of the Goods and Services Tax Act, 2017 (for brevity “GST Act”) by a Division Bench of this Court in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors.(CWJC No. 1848 of 2023 & anrlogous cases), decided on 19.09.2023. However, observations in Paragraphs 77 and 78 of the said judgment have been stayed on 04.12.2023 by the Hon’ble Supreme Court in Special Leave to Appeal (C) No. 25437 of 2023.
3. We also notice from Notification No. 53/2023 dated 02.11.2023 issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), which permitted filing of delayed appeals even beyond the period provided under Section 107 of the GST Act, that the stipulation was of paying an amount of 12.5 per cent of the amounts pending and due to be paid to the Department as against the 10 per cent prescribed by the statute. In the said Notification issued by the Central Government on the recommendation of the GST Council, it has been specifically stated that at least 20 per cent of the 12.5 per cent remaining due and payable should be paid from the Electronic Cash Ledger. Hence, even the GST Council understood the ten per cent to be enabled for payment through the Electronic Credit Ledger.
4. We are not differing from the Division Bench judgment which being a Coordinate Bench binds us. However, we notice that the Hon’ble Supreme Court has stayed the Division Bench judgment and in such circumstances, especially since consideration of the appeal on merits is the question raised before us, we are of the opinion that pending decision of the Hon’ble Supreme Court, the appeal should be considered on merits.
5. We hence, set aside the order in appeal dated 14.01.2023 and direct the same to be considered on merits. It is pointed out that in the present case, already ten per cent of the amount remaining due and payable is remitted from the Electronic Credit Ledger which would make the appeal maintainable and the Appellate Authority shall consider it on merits.
6. The writ petition is allowed with the above directions.