Satyadevi Alamuri Vs Office of Assistant Commissioner of GST and Central Excise (Madras High Court)
The Madras High Court (Madurai Bench) quashed a tax demand order raised against a company under liquidation, holding that deposits made into the Electronic Cash Ledger under Section 49 of the CGST Act must be treated as valid tax payments—even in the absence of GSTR-3B return filing—when such filing is rendered impossible due to liquidation proceedings and GST registration cancellation.
The petitioner, acting as liquidator under an NCLT order, had deposited the entire tax liability for the period April 2019 to December 2019 through challans into the Electronic Cash Ledger. However, due to the cancellation of GST registration and the company being under voluntary liquidation, the returns could not be filed to formally debit the ledger.
The Court held that the tax authorities’ refusal to treat these deposits as discharge of tax liability was legally untenable, emphasizing that procedural impediments arising out of insolvency proceedings should not obstruct substantive tax compliance. The petitioner cited CBIC Circular No. 134/04/2020-GST to support his contention that deposits made during such circumstances should be refunded or adjusted, not ignored. The Court directed the tax department to appropriate the deposited amounts toward the liability and quashed the impugned order demanding tax, interest, and penalty.
