M/S Friends Mobile vs. The State Of Bihar

Held

The Court held that pending the decision of the Hon'ble Supreme Court on the matter, the appeal should be considered on its merits. The Court set aside the order dated 10.01.2023 of the Appellate Authority, directing that the appeal be considered on merits. The Court clarified that there should be no insistence on payment of the ten percent due and payable under Section 107 of the GST Act from the Electronic Cash Ledger, especially since the petitioner had already remitted the amount from the Electronic Credit Ledger, making the appeal maintainable. The Court also directed the Commissioner, Commercial Taxes, Patna, to issue necessary directions for the consideration of appeals when the subject matter is pending before the Hon'ble Supreme Court. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s Friends Mobile, filed an appeal against an order of the Appellate Authority. The petitioner had paid the mandatory ten percent of the disputed amount from their Electronic Credit Ledger. The Appellate Authority, by an order dated 10.01.2023, rejected the appeal solely on the ground that the ten percent pre-deposit must be made from the Electronic Cash Ledger. This position was previously accepted by a Division Bench of the same High Court in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors. However, the Supreme Court has since stayed paragraphs 77 and 78 of that judgment. The Court also noted a notification allowing delayed appeals which stipulated payment of 12.5% of dues, with at least 20% of that amount to be paid from the Electronic Cash Ledger.

Key Issues

1. Whether the ten percent of the due amounts, required for filing an appeal under Section 107 of the GST Act, must be paid from the Electronic Cash Ledger or if payment from the Electronic Credit Ledger is permissible. Petitioner's Contention: The petitioner argued that payment from the Electronic Credit Ledger should be permissible, as evidenced by the understanding in Notification No. 53/2023, which, while increasing the pre-deposit to 12.5%, specified that at least 20% of that amount should be paid from the Electronic Cash Ledger, implying the remainder could be from the credit ledger. The petitioner also relied on the fact that their appeal was maintainable as the ten percent was already remitted from the Electronic Credit Ledger. Revenue's Contention: The revenue, represented by the State of Bihar, contended that the ten percent pre-deposit must be made from the Electronic Cash Ledger, a position previously upheld by a Division Bench of the High Court. They relied on the Division Bench judgment in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors.