Getronics Solutions India Private Limited Vs Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court allowed the writ petition challenging the rejection of a GST appeal on the ground of non-compliance with the mandatory pre-deposit under Section 107(6) of the CGST Act. The petitioner was subjected to proceedings under Section 74 of the CGST Act for the period July 2017 to March 2020. During the pendency of adjudication, the petitioner deposited ₹1,99,10,490 under protest, which exceeded 10% of the disputed tax. The adjudication culminated in an Order-in-Original dated 26.02.2023 confirming tax, interest, and penalty, raising a total demand of ₹11,41,38,249.
When the petitioner filed an appeal before the Appellate Authority, it requested that the earlier payment made under protest be treated as satisfaction of the statutory pre-deposit requirement. The Appellate Authority declined to treat the said amount as a valid pre-deposit, leading the petitioner to make an additional payment of ₹1,14,14,339 on 02.02.2024 by debiting its Electronic Credit Ledger. Despite these payments, the Appellate Authority rejected the appeal by order dated 28.02.2024 on the ground that the mandatory 10% pre-deposit had not been made.
Before the High Court, the petitioner contended that the amount deposited under protest during adjudication proceedings ought to be adjusted towards the mandatory pre-deposit, relying on the Supreme Court decision in VVF (India) Ltd., which interpreted a pari materia provision under the Maharashtra VAT Act. It was further contended that utilisation of the Electronic Credit Ledger to make the pre-deposit was permissible, as held by a coordinate Bench of the High Court in VK Building Services Pvt. Ltd.
