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

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.

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