Order Date: 16 September 2022

Facts-

• The Petitioner’s Oasis Realty and others filed this writ petition against the allegation of the revenue that the appellant can utilize the credit available only in the Electronic Cash Ledger.
• The Revenue contended that before a party files an Appeal, Sub-section (6) of Section 107 mandates the party to pay in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order as is admitted by him.
• The revenue contended that subsection (4) of Section 49 restricts the usage of the amount available in the Electronic Credit Ledger only for payment of output tax and the amount available cannot be utilized for payment of tax under Section 107(6)(b).

Issue-

• Whether an Appellant, to comply with the requirements of Sub-section 6 of Section 107 of paying a sum equal to 10% of the amount of Tax in dispute arising out of the impugned order, can pay the amount utilizing the credit available in the Electronic Credit Ledger?

Order-

• The Division Bench of Hon’ble High Court observed that this clarification came to be issued in view of various representations that CBIT&C received on utilization of the amounts available in the Electronic Credit Ledger and the Electronic Cash Ledger for payment of tax and other liabilities. The CBIT&C, in its circular F. No.CBIC-20001/2/2022-GST dated 6th July 2022 has clarified  that any amount towards output tax payable, as a consequence of any proceeding instituted under the provisions of GST Laws, can be paid by utilization of the amount available in the Electronic Credit Ledger of a registered person. The CBIT&C has also requested that suitable trade notices be issued to publicize the contents of the circular.
• The Court held that the Petitioners may utilize the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act.
• Accordingly, the impugned Order-in-Appeal was quashed and set aside.