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Pre-deposit is to be paid through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC

Bimal jain
Company Must Use Electronic Cash Ledger for Pre-Deposit When ITC Blocked, Says Court Under Section 107(6) The Madras High Court ruled that a company must pay the pre-deposit amount through the Electronic Cash Ledger when its Electronic Credit Ledger is blocked due to the denial of Input Tax Credit (ITC). The company challenged an appellate order that rejected its appeal, arguing that it should not be required to make a pre-deposit since its ITC was blocked. The court dismissed the writ petition, stating that the company must deposit 10 percent of the disputed amount from the Electronic Cash Ledger to proceed with the appeal. (AI Summary)

The Hon’ble Madras High Court in the case of M/S. KOG-KTV FOOD PRODUCTS (INDIA) PVT LTD REP BY ITS MANAGING DIRECTOR MR. K.T.V. NARAYANAN VERSUS THE JOINT COMMISSIONER (APPEALS) COIMBATORE, THE ASSISTANT COMMISSIONER OF CGST & CENTRAL EXCISE, TUTICORIN - 2024 (5) TMI 968 - MADRAS HIGH COURT dismissed the writ petition and held that the Appellant is liable to pay the amount of pre-deposit through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC.

Facts:

KOG-KTV Food Products (India) (P.) Limited (“the Petitioner”) has filed a writ petition against the Appellate Order dated August 10, 2022 (“the Impugned Order”) passed by the Revenue Department (“the Respondent”) wherein the appeal filed by the Petitioner was rejected. The Petitioner contends that the Petitioner is not required to pre-deposit the amount as the Input Tax Credit (“ITC”) of the Petitioner was blocked.

Issue:

Whether the pre-deposit is to be paid through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC?

Held:

The Hon’ble Madras High Court in the case of M/S. KOG-KTV FOOD PRODUCTS (INDIA) PVT LTD REP BY ITS MANAGING DIRECTOR MR. K.T.V. NARAYANAN VERSUS THE JOINT COMMISSIONER (APPEALS) COIMBATORE, THE ASSISTANT COMMISSIONER OF CGST & CENTRAL EXCISE, TUTICORIN - 2024 (5) TMI 968 - MADRAS HIGH COURT held as under:

  • Noted that, as the dispute is in relation to denial of ITC, therefore the Petitioner cannot deposit the amount from Electronic Credit Ledger.
  • Opined that, the Petitioner is required to pre-deposit the 10 percent of the disputed amount from Electronic Cash Ledger for filing of the appeal. 
  • Held that, the writ petition is liable to be dismissed.

 (Author can be reached at [email protected])

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