TaxTMI 
TaxTMI 
2024 (11) TMI 1333
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....arts, components and engines. He has duly filed GST returns periodically and discharged appropriate tax liability under the provisions of CGST Act. While being so, on 24.03.2023, he was issued with a notice in Form DRC-01A, proposing to demand the differential GST on account of tax liability difference between Form GSTR-1 and GSTR-3B Returns filed by him for the period of 2017 to 2018, for which, he, vide letter dated 05.04.2023, has filed a detailed reply along with relevant documents. Thereafter, on 30.05.2023, he was issued with a show cause notice in Form DRC-01('SCN'). Consequently, the 2nd respondent confirmed the demand proposed in the SCN along with interest and penalty vide Order-in-Original No.ZD330723115801Q, dated 26.07.2023. 4. Aggrieved by the same, the petitioner filed an appeal before the 1st respondent through the GST portal on 24.10.2023 by paying 10% of the dispute tax demand of Rs. 32,88,352/- as pre-deposit, which is mandatory as per Section 107(6) of the Tamil Nadu Goods and Service Act, 2017 (hereinafter referred to as ' TNGST Act') and also filed a physical copy of the said appeal on 27.10.2023. The petitioner had opted to pay the pre-deposi....
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....Vs. Union of India reported in 2023 (71) GSTL 158 (Bombay High Court); (ii) Friends Mobile through its Proprietor Md.Quadir Khan Vs. State of Bihar and other reported in 2023(12) TMI 469 (Patna High Court); and (iii) Raiyan Traders Vs. State of Bihar reported in 2024-VIL-978 (Patna High Court). 8. The learned Additional Advocate General appearing for the respondents would submit that as per Section 107(6) of TNGST Act, 10% of the tax liable amount has to be paid for filing an appeal by the petitioners as pre-deposit. It does not state that the pre-deposit amount is the tax amount. The petitioners paid the pre-deposit through Electronic Credit Ledger, which has to be paid only through Electronic Cash Ledger as contemplated under Section 49 of TNGST Act. Under Section 49(3) of TNGST Act, the payments from the Electronic Cash Ledger are for the payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the Act or the Rules. Further in terms of Section 49(4) of TNGST Act, the payment from the Electronic Credit Ledger are for the payment towards output tax under the Act. This clearly establishes that the Electronic Credit Ledger should only be ....
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....s juncture, it is necessary to extract Section 107(6) of TNGST Act hereunder:- "(6)-No Appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.". 14.The petitioners filed appeals by paying 10% of the disputed tax, utilizing the amount available in the Electronic Credit Ledger. However, the 1st respondent has dismissed the appeals filed by the petitioners on the ground that the pre-deposit has to be paid through Electronic Cash Ledger and not through Electronic Credit Ledger and the amount available in the Electronic Credit Ledger can be utilized only for the purpose of payment towards output tax in terms of Section 49(4) of TNGST Act. It is necessary to extract Section 49(4) of TNGST Act hereunder:- "49(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax....
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.... tax, Central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax. After due compliance of the provisions, which is also an admitted position, the Central Board of Indirect Taxes and Customs in its circular dated 06.07.2022 in paragraph 4 of Sl.No.6, stated as follows:- "4. Accordingly, it is clarified that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registered person." 17.A reading of the said circular shows that input tax credit can be utilized not only for payment of the self assessed output tax but also payable as a consequence of the proceeding instituted under the provisions of GST Laws. This circular also clarifies the position that to discharge the liability of 10% of the output tax liability in terms of Section 107(6) of TNGST Act, the amount can be remitted through Electronic Credit Ledger. Further, as contended by the petitioners that the only restrictions on the usage of Electronic Credit Ledger for payment of pre-deposit is in r....