Adjustment

[Sudhir Kumar]

If taxpayer has pre deposited the amount against filing appeal and after dismissal of appeal he is willing to adjust such pre deposit amount with demand confirmed in order, is any circular is having in existence in support of his claim.

[KASTURI SETHI]

Dear Querist,

There are pro-revenue case laws (pertaining to pre-GST era) wherein it has been held that pre-deposit is an amount and not duty or tax.

"Pre-deposit is not a payment of duty but only a pre-deposit for availing right of appeal"------Supreme Court in the case of UOI Vs. Suvidhe Ltd. reported as 1996 (8) TMI 521 - SC ORDER and

(i) Bombay in the case of Suvidhe Ltd. Vs. UOI - 1996 (2) TMI 136 - BOMBAY HIGH COURT

(ii) There is also Board's circular which treats pre-deposit as an amount and not duty.

(iii) There is a plethora of judgements wherein various High Courts on the basis of the judgement of Supreme Court had allowed the refund of pre-deposit on the ground that pre-deposit is an amount and not duty and so time bar limit for the purpose of refund was not applicable, it being not duty/tax.

Worth reading deeply.

[Shilpi Jain]

If the order has not appropriated, then you can write to the officer after paying off the remaining demand asking to adjust with the pr-deposit.

AI Summary

Pre-deposit treated as non-tax amount allows adjustment against confirmed demand if not appropriated by order.
Pre-deposit for filing an appeal is characterised as an amount for securing the right to appeal and not as duty or tax; courts and administrative guidance have allowed refunds and held time bar for duty inapplicable where the payment was not appropriated. If the order has not appropriated the pre-deposit, the taxpayer can seek adjustment of that pre-deposit against the confirmed demand, typically after addressing any remaining demand shortfall.