Union Of India Vs Yasho Industries Limited
Date: May 18, 2025
Subject Matter
Electronic Credit Ledger could be utilized for pre-deposit requirements
Summary
The Supreme Court of India dismissed a Special Leave Petition filed by the Union of India, thereby upholding a Gujarat High Court judgment that allowed Yasho Industries Limited to use its Electronic Credit Ledger (ECL) to pay the pre-deposit for its Goods and Services Tax (GST) appeal. This decision rejected the Revenue Department's requirement for payment through the Electronic Cash Ledger. The dispute originated from a tax demand placed on Yasho Industries regarding the refund of Integrated Goods and Services Tax (IGST) and penalties, which arose from an alleged contravention of Rule 96(10) of the CGST Rules, 2017. Following an adverse decision confirming the demand, Yasho Industries made the required pre-deposit of INR 3,36,82,000 through its ECL as per Section 107(6)(b). However, the tax authorities insisted that this amount must be paid via the Electronic Cash Ledger. The Gujarat High Court ruled in favor of Yasho Industries, supported by prior judgments and a circular from the Central Board of Indirect Taxes and Customs (CBIC) asserting that the pre-deposit could be satisfied through the ECL for output tax liabilities. The Supreme Court, hearing the matter, found no merit in the Revenue Department's arguments and emphasized that cases initially filed by assessees were not grounds for their Petition. As a result, the Supreme Court dismissed the petition, affirming the High Court’s decision and thus clarifying the provisions related to permissible payment modes for pre-deposits in GST appeals, providing significant relief to taxpayers. The deletion of Rule 96(10) in 2024 may also affect related ongoing disputes.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
In Special Leave Petition (C) Nos. 25437/2023 and 324/2024, the Assessees have preferred the petitions before this Court which have been entertained. When the Revenue has preferred
Special Leave Petition (C) D.No.508/2025, reliance has been placed on the fact that the Assessees petitions have been entertained by this Court and therefore on that basis notices were issued in the case of Chief Commissioner of CGST and C.E. and Anr. Vs. M/s. Shiv Crackers.
Today, Shri Abhishek A Rastogi, learned counsel for the respondent/caveator has brought to our notice the fact that initially notices were issued by this Court in the Special Leave Petitions filed by the Assessees. The respondent(s) ought not to have relied upon those cases for the purpose of seeking notice(s) in their Petitions also. In the circumstances, he submitted that there is no merit in this special leave petition. He also brought to our notice the fact of the Rule 96(10) of the CGST has been deleted in the year 2024.
We have heard learned counsel for the petitioner(s)/Department. The Department’s contention is that since similar matters are pending before this Court, this case also may be tagged with those cases.
As already noted, the aforesaid cases initially filed before this Court are of the Assessees and not of the Department. In the circumstances, we find that the impugned order passed by the High Court in R/SCA No. 10504/2023 would not call for any interference. Hence, the Special Leave Petition is dismissed.
Pending application(s) shall stand disposed of.