Electronic credit ledger pre-deposit under GST appeal rules cannot be rejected without to cure deficiency.

A pre-deposit made through the electronic credit ledger was treated as capable of satisfying the Section 107 appeal requirement under the CGST Act, and the appellate authority could not dismiss the appeal for alleged shortfall without first giving the assessee an opportunity to cure the deficiency. The Court relied on the view that such ledger-based payment is a valid deposit where the applicable legal position supports that approach. The appellate order was quashed and the matter remanded for fresh consideration, with permission to make good any remaining shortfall under Section 107(6).

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Issues: Whether the pre-deposit made through the electronic credit ledger could be treated as a valid pre-deposit for filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017, and whether the appellate order dismissing the appeal for alleged shortfall in pre-deposit was sustainable.

Analysis: The Court noted that the challenge was to the dismissal of the appeal solely on the ground that the amount deposited through the electronic credit ledger was not a valid deposit under Section 107 and was below the prescribed statutory pre-deposit. The Court further noted the view taken by the Division Bench of the Gujarat High Court that a deposit through the electronic credit ledger is a valid deposit in terms of the relevant circular, and that no contrary decision was shown. The Court also observed that, even if the appellate authority treated the deposit as deficient, the assessee ought to have been confronted with the alleged shortcoming and given an opportunity to cure it.

Conclusion: The appellate order was quashed, and the matter was remanded to the appellate authority to decide the appeal afresh and to treat the amount paid through the electronic credit ledger as a valid deposit for the purpose of Section 107, while permitting the petitioner to make good any remaining shortfall under Section 107(6).

Final Conclusion: The writ petition succeeded, the impugned appellate order was set aside, and the appeal was restored for fresh consideration in accordance with law.

Ratio Decidendi: A pre-deposit made through the electronic credit ledger cannot be rejected without affording the assessee an opportunity to cure any alleged deficiency, and such deposit must be treated as valid for the purpose of filing the appeal where the applicable legal position supports that view.

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