2026-VIL-1069-TEL
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SGST High Court Cases

GST - Deposit in Electronic Cash Ledger - Discharge of Tax Liability – Demand of interest under Section 50(1) CGST Act, 2017 - Petitioner deposited tax amount in Electronic Cash Ledger on 05.01.2019 well before due date but corresponding liability declared in GSTR-1 return for December 2018 was discharged only upon filing GSTR-3B return for September 2019 on 17.10.2019 - During scrutiny officer issued demand notice under Section 50(1) for interest calculated for 273 days - Petitioner contended that once tax amount was deposited in Electronic Cash Ledger, amount was lying with Government and available for appropriation towards liability and could not be held liable for interest on account of subsequent delay in debiting ledger particularly when delay was attributable to technical glitches on GST portal - Whether deposit of amount in Electronic Cash Ledger prior to due date for filing GSTR-3B return, without corresponding debit towards liability, amounts to discharge of tax liability for purposes of Section 50(1) - HELD - Statutory scheme under Sections 39, 49 and 50 of CGST Act and Rule 87 of CGST Rules contemplates distinction between deposit of amount into Electronic Cash Ledger and its subsequent utilization towards discharge of particular tax liability - Mere credit in Electronic Cash Ledger does not by itself result in appropriation of amount towards particular liability. Debit towards tax liability occurs upon filing return and utilization of amount available in ledger - Electronic Cash Ledger operates as statutory ledger in which amounts are credited and from which amounts are thereafter debited towards discharge of tax liabilities. Mere availability of balance in ledger does not identify or appropriate such amount towards self-assessed tax liability. Tax liability stands discharged only when amount is debited from ledger towards liability upon filing GSTR-3B return and not upon mere deposit in ledger. Therefore intervening period between deposit and debit constitutes period of delayed discharge for which interest is payable under Section 50(1) - Existence of technical difficulties without establishing that they prevented discharge in prescribed manner cannot alter statutory consequence flowing from delayed discharge - Impugned notices do not suffer from illegality or arbitrariness - The writ petition is dismissed
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