High Court · 2025

W.A.No.2414 of 2025IN THE HIGH COURT OF JUDICATURE AT MADRASDated: 13.08.2025CORAM :THE HONOURABLE DR.JUSTICE ANITA SUMANTHandTHE HONOURABLE MR.JUSTICE N.SENTHILKUMAR W.A.No.2414 of 2025P.Jayaraman...AppellantVs.1.State Tax Officer, Mayiladuthurai Assessment Circle,2.The Branch Manager, IOB Bank, 188, Vellala Street, Manalmedu - 609 202....RespondentsPRAYER: The writ appeal has been filed under clause 15 of the Letters Patent to allow the writ appeal by setting aside the impugned order dated 07.07.2025 in W.P.No.24128 of 2025.For Appellant ... Mr.Sathyanarayana AGFor Respondents ... Mr.Prashanth Kiran Government AdvocateJUDGMENT(Delivered by Dr.ANITA SUMANTH,J.)Read this order in continuation of and in conjunction with order dated 06.08.2025 that reads as follows:'Learned counsel for the appellant, on instructions, states that the 1 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 2025appellant is willing to file an appeal manually and will do so within a period of one week from today. Let the appeal be filed manually for now.2. In such circumstances, upon confirmation of filing of appeal by the appellant within a week, further orders will be passed in regard to lifting of bank attachment. 3. Such appeal will be received by the Registry of the Appellate Assistant Commissioner in anticipation of, and subject to orders relating to pre-deposit. 4. List on 13.08.2025'. 2. Today, two memos, dated 06.08.2025 and 11.08.2025, have been filed by the appellant, reading as follows:Memo dated 06.08.2025:1.It is respectfully submitted that the present memo being filed in compliance the orders of this Hon'ble Court during the hearing dt.06.08.2025.2.It is respectfully submits that the Assessing officer had earlier initiated assessment proceedings against the Appellant for the Financial Year 2020-21 passing of the alleged impugned Order dt.20.02.2025 confirming the discrepancies and held the appellant liable to excess ITC, interest, penalty and late fees, totalling to Rs.12,49,038/- and the 10% disputed tax amounts to Rs.1,24,904/- (Rupees One Lakh Twenty Four Thousand four Only).3.I submit that the appellant bank account is freezed and the Bank account details is as follows:Current Account No.022902000001002Bank: Indian Overseas BankBranch: ManalmeduBalance as on date: 21,92,160.75/-4.The appellant most humbly prays that this Hon'ble Court to take on record this memo on record and pass suitable orders or further orders in the interest of justice.'Memo 11.08.2025:1.It is respectfully submitted that the present memo being filed in compliance with the Order of this Hon'ble Court dt.06.08.20252.It respectfully submits that pursuant to the Order dated 2 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 202506.08.2025 passed by this Hon'ble Court in the present Appeal, the Appellant has filed an appeal before the Appellate Authority within the stipulated period of one week, in compliance with the directions of the Hon'ble Court. Copy of the Acknowledgement of the Appeal is enclosed herewith as " Annexure - I".3.It is respectfully submitted that this Hon'ble Court directed the Appellant to make a pre-deposit equivalent to 10% of the disputed tax amount, which aggregates to Rs.1,24,904. However, 1st Respondent has already effected a debit of Rs.73,816 for the year 2020-21 from the electronic credit ledger maintained under the GST regime. Details of the Amount debited from the electronic ledger is stated hereunder:-S.No.DateTax PeriodAmount debited1.17.06.2025March - 21Rs.62,7902.30.07.2025March - 21Rs.11,026 TotalRs.73,8164.Accordingly, the Appellant has remitted Rs.73,816 towards the disputed demand, and the balance amount of Rs.51,088 is remaining to satisfy towards the 10% of the disputed tax demand as directed by this Hon'ble Court. Consequently, the Appellant has partly paid and complied with the directions issued by this Hon'ble Court vide order dated 06.08.2025. Copy of the electronic ledger is enclosed herewith as "Annexure'2".5.It is most humbly prays that this Hon'ble Court may be pleased to take on record this memo of compliance and pass suitable orders or further orders in the interest of justice. '3. He also submits that a sum of Rs.73,816/- has been debited from out of the electronic credit ledger. Hence, the Court suggests that the balance amount required for pre-deposit may also be debited from out of the electronic credit ledger, which has sufficient credit. 3 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 20254. This is in line with Circular bearing F.No.CBIC-20001/2/2022-GST dated 06.07.2022 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, that approves the above methodology.5. In the interests of completion, the relevant portions of Circular dated 06.07.2022 is extracted below:'F.No.CBIC-20001/2/2022-GSTGovernment of IndiaMinistry of FinanceDepartment of RevenueCentral Board of Indirect Taxes and CustomsGST Policy WingTo New Delhi, Dated the 6th July, 2022The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All)The Principal Directors General/Directors General (All)Madam/Sir,Subject : Clarification on various issue pertaining to GST - reg. Various representations have been received from the field formations seeking clarification on certain issues with respect to - .. . ...2.In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods ad Services Tax Act, 2017 (hereinafter referred to as "CGST Act), hereby clarify the issues as under:4 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 2025S.No.IssueClarification1.......Utilisation of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities.6.Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST Laws?1. In terms of sub-section (4) of setion 49 of CGST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under the CGST Act or the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as "IGST Act"), subject to the provisions relating to the order of utilisation of input tax credit as laid down in section 49B of the CGST Act read with rule 88A of the CGST Rules.2.Sub-rule (2) of rule 86 of the CGST Rules provides for debiting of the electronic credit ledger to the extent of discharge of any liability in accordance with the provisions of section 49 or section 49A or section 49B of the CGST Act.3.Further, output tax in relation to a taxable person (i.e. a person who is registered or liable to be registered under section 22 or section 24 of the CGST Act) is defined in clause (82) of section 2 of the CGST Act as the tax chargeable on taxable supply of goods or services or both but excludes tax payable on reverse charge mechanism.4.Accordingly, it is clarified that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any procceding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registtered person.5. It is further reiterated that as output tax does not include tax payable under reverse charge mechanizm, implying thereby that the electronic credit ledger cannot be used for making payment of any tax which is payable under reverse charge mechanism.7.Whether the amount available in As per sub-section (4) of section 49, the electronic credit ledger can be used for making payment of output 5 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 2025S.No.IssueClarificationthe electronic credit ledgr can be used for making payment of any liability other than tax under the GST Laws?tax only under the CGST Act or the IGST Act. It cannot be used for making payment of any interest, penalty, fees or any other amount payable under the said acts. Similarly, electronic credit ledger cannot be used for payment of erroneous refund sanctioned to the taxpayer, where such refund was sanctioned in cash.8.Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST Laws?As per sub-section (3) of section 49 of the CGST Act, the amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the GST Laws.6. With this, the filing of the appeal will be regularised and any delay in filing the appeal now stands condoned. Let the appeal be taken up by the appellate authority for hearing and disposed in accordance with law, including adherence to principles of natural justice. The attachment of bank account at paragraph 3 of memo dated 06.08.2025 shall be lifted forthwith. 7. This Writ Appeal is closed in terms of this order. No costs. [A.S.M.,J][N.S.,J] 13.08.2025slIndex:YesSpeaking orderNeutral Citation:YesTo 1.State Tax Officer, Mayiladuthurai Assessment Circle,6 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 20252.The Branch Manager, IOB Bank, 188, Vellala Street, Manalmedu - 609 202.Dr.ANITA SUMANTH,Jand N.SENTHILKUMAR,J7 https://www.mhc.tn.gov.in/judis W.A.No.2414 of 2025slW.A.No.2414 of 202513.08.20258