Army Welfare Housing Organisation Vs Union of India & Ors. (Delhi High Court)
The Delhi High Court considered whether CENVAT credit lying in the petitioner’s account prior to 1 July 2017, and duly transitioned into the electronic credit ledger after the introduction of GST, could be utilised to make the mandatory pre-deposit for filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The dispute arose from an order dated 23 June 2023 raising a service tax demand of ₹84,95,49,572 along with penalty. When the petitioner filed appeals before CESTAT, the Tribunal dismissed them on 13 March 2024 solely on the ground that the mandatory pre-deposit had not been made in a permissible manner. The petitioner had attempted to use transitioned credit through Form DRC-03 for the pre-deposit, which CESTAT declined to accept, observing that it lacked the liberty exercised by High Courts in writ jurisdiction.
Before the High Court, the petitioner contended that, prior to GST, CENVAT credit was routinely permitted to be used for pre-deposits, as reflected in a CESTAT circular dated 28 August 2014. It was argued that this benefit could not be taken away merely because of the transition to GST. Reliance was placed on decisions of CESTAT, Mumbai and the Bombay High Court which had permitted adjustment of pre-deposits from DRC-03, and on earlier Bombay High Court authority recognising similar relief.
