Pre-deposit is to be paid through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC

Last updated: 04 June 2024

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Quick Summary

The Madras High Court has ruled that pre-deposit payments for appeals must be made through the Electronic Cash Ledger if the Electronic Credit Ledger is blocked. This decision was made in the case of KOG-KTV Food Products (India) (P.) Limited, where the court dismissed the petitioner's argument that they shouldn't have to pay the pre-deposit because their Input Tax Credit (ITC) was blocked. The court clarified that if ITC is denied, the pre-deposit must be paid from available cash.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in the case of KOG-KTV Food Products (India) (P.) Limited v. Joint Commissioner (Appeals) [W.P. (MD) No. 21581 of 2022 dated April 17, 2024] dismissed the writ petition and held that the Appellant is liable to pay the amount of pre-deposit through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC.

Citation :
W.P. (MD) No. 21581 of 2022 dated April 17, 2024

The Hon'ble Madras High Court in the case of KOG-KTV Food Products (India) (P.) Limited v. Joint Commissioner (Appeals) [W.P. (MD) No. 21581 of 2022 dated April 17, 2024] dismissed the writ petition and held that the Appellant is liable to pay the amount of pre-deposit through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC.

Facts

KOG-KTV Food Products (India) (P.) Limited ("the Petitioner") has filed a writ petition against the Appellate Order dated August 10, 2022 ("the Impugned Order") passed by the Revenue Department ("the Respondent") wherein the appeal filed by the Petitioner was rejected. The Petitioner contends that the Petitioner is not required to pre-deposit the amount as the Input Tax Credit ("ITC") of the Petitioner was blocked.

Issue

Whether the pre-deposit is to be paid through Electronic Cash Ledger when Electronic Credit Ledger is blocked due to denial of ITC?

Held

The Hon'ble Madras High Court in the case of W.P. (MD) No. 21581 of 2022 held as under:

Noted that, as the dispute is in relation to denial of ITC, therefore the Petitioner cannot deposit the amount from Electronic Credit Ledger.
Opined that, the Petitioner is required to pre-deposit the 10 percent of the disputed amount from Electronic Cash Ledger for filing of the appeal.
Held that, the writ petition is liable to be dismissed.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED

FAQ :

The main issue was whether a pre-deposit payment for an appeal could be made from the Electronic Credit Ledger when that ledger was blocked due to denied Input Tax Credit (ITC).

The Madras High Court decided that the pre-deposit must be paid through the Electronic Cash Ledger when the Electronic Credit Ledger is blocked due to denied ITC.

The petitioner's Electronic Credit Ledger was blocked because their Input Tax Credit (ITC) had been denied.

The court opined that the petitioner was required to pre-deposit 10 percent of the disputed amount for filing the appeal.

The writ petition filed by KOG-KTV Food Products (India) (P.) Limited was dismissed.