Objection for Non-Payment of Advance Deposit Cannot Be Dismissed if Ministry’s Portal Confirms Eligibility: Bombay High Court

Section Bench Justice MS Sonak And Justice Jitendra Jain I observed this on a similar issue: Bytedance (India) Technology Pvt Ltd and UOI (WP (L) No.23724, 2024)It has been regulated by this court as follows: “Regarding the preliminary deposit amount, there is sufficient evidence attached to the petition that the amount has been deposited, and even the receipt has been attached to the petition. Therefore, it is wrong to say that there is no preliminary deposit in the order in question.”.

Facts of the case:

The appeal filed by the Petitioner/Assessee was rejected on the ground of non-payment of advance deposit of 10% of the disputed amount under Section 107(6) CGST. Therefore, the present petition is before the Supreme Court.

Observations of the Supreme Court:

The court referred to the plaintiff’s claim that he had deposited a preliminary deposit of Rs. 4,42,55,474/- (10% of the disputed tax amount) while filing an appeal before the defendant.

In the memorandum of appeal, i.e. Form APL-01 itself, the Court found that the amount of the preliminary deposit paid was stated.

Additionally, the petition included screenshots of the Petitioner’s Electronic Credit Ledger and Electronic Cash Ledger downloaded from the GSTN portal; these images show that the Petitioner made payment of a total amount of Rs. 4,42,55,474/- Bench added from Electronic Credit Ledger.

The Board also addressed the provisional acceptance of the system-generated objection, which was automatically generated by the Defendants’ portal when the assessee filed an objection.

The Court added that if the Respondent is dissatisfied with the amounts allegedly paid by the Petitioner, he must indicate this to the Petitioner and give the Petitioner the opportunity to clarify and prove the payments made by him.

The Supreme Court therefore reversed the decision to dismiss the appeal and remanded the matter back to the Respondent for reconsideration.

Counsel for the Petitioner/ Considered: Sriram Sridharan and Shanmuga Dev

Defendant Counsel/Income: Karan Adik and Sangeeta Yadav

Case Title: Delphi World Currency and the Union of India

Case Number: Writ Petition No. 28914, Dated 2024