Case Law Details
Raiyan Traders Vs State of Bihar (Patna High Court)
In Raiyan Traders Vs State of Bihar, the Patna High Court addressed the issue of whether 10% of the tax amount required for filing an appeal under the GST Act can be paid from the Electronic Credit Ledger instead of the Electronic Cash Ledger. The petitioner had paid the amount from the Credit Ledger, but the Appellate Authority rejected the appeal, citing the need to use the Cash Ledger. The Court referenced a Division Bench ruling in Flipkart Internet Pvt. Ltd. v. State of Bihar, which supported the Appellate Authority’s stance. However, the Supreme Court had stayed certain observations of that judgment. Additionally, the Court considered Notification No. 53/2023 from the Ministry of Finance, which allowed delayed appeals and permitted partial payments from the Credit Ledger. Acknowledging the Supreme Court’s stay and pending decision, the High Court directed that the petitioner’s appeal should be reconsidered on its merits, as 10% of the amount had already been paid from the Credit Ledger. The writ petition was allowed, and the previous order rejecting the appeal was set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The issue raised in the above writ petition is as to whether on filing an appeal the ten per cent of the due amounts are to be paid from the Electronic Cash Ledger or the Electronic Credit Ledger.
2. In the present case, the petitioner paid the ten per cent amount from the Electronic Credit Ledger. The Appellate Authority by order dated 14.01.2023 rejected the appeal on the ground that the ten per cent has to be paid from the Electronic Cash Ledger. In fact, the said position has been accepted after going into the various provisions of the Goods and Services Tax Act, 2017 (for brevity “GST Act”) by a Division Bench of this Court in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors.(CWJC No. 1848 of 2023 & anrlogous cases), decided on 19.09.2023. However, observations in Paragraphs 77 and 78 of the said judgment have been stayed on 04.12.2023 by the Hon’ble Supreme Court in Special Leave to Appeal (C) No. 25437 of 2023.
3. We also notice from Notification No. 53/2023 dated 02.11.2023 issued by the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs), which permitted filing of delayed appeals even beyond the period provided under Section 107 of the GST Act, that the stipulation was of paying an amount of 12.5 per cent of the amounts pending and due to be paid to the Department as against the 10 per cent prescribed by the statute. In the said Notification issued by the Central Government on the recommendation of the GST Council, it has been specifically stated that at least 20 per cent of the 12.5 per cent remaining due and payable should be paid from the Electronic Cash Ledger. Hence, even the GST Council understood the ten per cent to be enabled for payment through the Electronic Credit Ledger.
4. We are not differing from the Division Bench judgment which being a Coordinate Bench binds us. However, we notice that the Hon’ble Supreme Court has stayed the Division Bench judgment and in such circumstances, especially since consideration of the appeal on merits is the question raised before us, we are of the opinion that pending decision of the Hon’ble Supreme Court, the appeal should be considered on merits.
5. We hence, set aside the order in appeal dated 14.01.2023 and direct the same to be considered on merits. It is pointed out that in the present case, already ten per cent of the amount remaining due and payable is remitted from the Electronic Credit Ledger which would make the appeal maintainable and the Appellate Authority shall consider it on merits.
6. The writ petition is allowed with the above directions.
Author Bio
