The Hon’ble Orissa High Court in the case of Jyoti Construction v. Deputy Commissioner of CT & GST, Jajpur [Writ Petition (C) Nos. 23508, 23511, 3513, 23514 AND 23521 OF 2021 decided on October 7, 2021] has held that the Electronic Credit Ledger (“ECRL”) cannot be used to give the pre-deposit for the purpose of filing an appeal under GST and the payment for the same must be done through Electronic Cash Ledger (“ECL”).

In the instant case, Jyoti Construction (“the Petitioner”) was faced with a GST demand raised by the Deputy Commissioner of CT & GST, Barbil Circle, Jajpur (“the Respondent”). An appeal was filed before the appellate authority under Section 62(1) of the Odisha Goods and Services Tax Act, 2017 (“OGST Act”) read with Rule 100(1) of the Orrisa Goods and Services Tax Rules, 2017 (“OGST Rules”) electronically.

In terms of Section 107(6) of the OGST Act, the Petitioner was required to make payment equivalent to 10% of the disputed amount of tax arising from the order against which the appeal is filed. The pre-deposit payment was made by the ECRL of the Petitioner. The Petitioner contended that under Section 49(4) of the OGST Act, the amount available in the ECRL could be used for making “any payment towards output tax” under the OGST Act. The said contention was based on the scenario that since what in effect be the Petitioner was paying was a percentage of the output tax as defined under Section 2(82) of the OGST Act, the amount could well be paid by debiting the ECRL.

According to the Respondent, the pre-deposit cannot be equated to the output tax and this liability of pre-deposit could be discharged only by debiting the ECL as provided under Section 49(3) of the OGST Act read with Rule 85(4) of the OGST Rules.

The Hon’ble Orissa High Court, after considering the contentions, held that “Output Tax”, as defined under Section 2(82) of the OGST Act could not be equated to the pre-deposit required to be made in terms of Section 107(6) of the OGST Act. Further, it was observed that the proviso to Section 41(2) of the OGST Act limits the usage to which the ECRL could be utilized whereby it cannot be debited for making payment of pre-deposit at the time of filing of the appeal in terms of Section 107(6) of the OGST Act. Hence, the Court dismissed this Petition.

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October 2021