Electronic Cash Ledger Pre-Deposit: 10% Mandatory for Disputed Input Tax Credit Under GST Act, Writ Petition Dismissed

HC ruled that a 10% pre-deposit from electronic cash ledger is mandatory for disputed input tax credit under GST Act. Writ petition was dismissed with liberty to deposit disputed amount within 30 days. Upon deposit, the original order would be quashed and appeal reinstated for merit-based consideration within six weeks.

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Issues involved: Petitioner challenging impugned order rejecting appeal against Order-in-Original No.1 of 2021-GST, related to denial of input tax credit and requirement of pre-deposit.

Summary:

Issue 1: Pre-deposit requirement for disputed input tax credit:
The petitioner contended that no pre-deposit should be required for the disputed input tax credit, citing a previous court decision. However, the court ruled that a pre-deposit of 10% of the disputed amount from the electronic cash ledger is necessary, not from the electronic credit ledger as per section 107 of the GST Act, 2017.

Issue 2: Dismissal of Writ Petition with liberty to deposit amount:
The court held that the Writ Petition is liable to be dismissed, but granted the petitioner liberty to deposit the disputed amount under section 105 within 30 days. Upon compliance, the impugned order would be quashed, and the appeal would be reinstated for the 1st respondent to decide on merits within six weeks, ensuring the petitioner's right to be heard.

In conclusion, the Writ petition was dismissed with liberty to deposit the amount as per section 105, and no costs were awarded. The connected miscellaneous petitions were closed accordingly.

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