Case Details: In Net India Pvt. Ltd. Versus Union of India (2025) 32 Centax 131 (Bom.)
Judiciary and Counsel Details
- M.S. Sonak & Jitendra Jain, JJ.
- Dr. Avinash Poddar V.C. a/w. Ms Deepali Kamble S/Shri Prakash Shah a/w. Jas Sanghavi i/b. PDS Legal, for the Petitioner.
- S/Shri Y.R. Mishra a/w. S.D. Deshpande, Satyaprakash Sharma, Karan Adik a/w. Ms Niyati Mankad V.C. & Akash Singh, for the Respondent.
Facts of the Case
The petitioner filed an appeal before the Commissioner (Appeals) and made the mandatory pre-deposit by utilising the Electronic Cash Ledger through Form DRC-03. The petitioner submitted that such payment constituted a valid pre-deposit as required under Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994. The petitioner relied upon the decision of the Coordinate Bench in Reliance Infrastructure Ltd. [2023 (69) G.S.T.L. 25 (Bom.)] and the averments made by the Departmental authority in its affidavit stating that payment from the Electronic Cash Ledger was as good as a cash payment. The Revenue contended that allowing pre-deposit through the credit ledger could lead to absurd results, but the petitioner submitted that the present case pertained only to payment through the Electronic Cash Ledger and not through the credit ledger.
The issue was whether the pre-deposit made in Form DRC-03 by debiting the Electronic Cash Ledger was valid for the purpose of hearing the appeal, and the matter was accordingly placed before the High Court of Bombay.
High Court Held
The High Court of Bombay held that the pre-deposit made by the petitioner in Form DRC-03 through the Electronic Cash Ledger was to be treated as valid and directed the Commissioner (Appeals) to accept the same for the purpose of hearing the appeal on merits. The Court referred to the decision in Reliance Infrastructure Ltd. [2023 (69) G.S.T.L. 25 (Bom.)] and the Departmental authority’s affidavit admitting that payment from the Electronic Cash Ledger was equivalent to a cash payment. The Court held that the Revenue’s contention regarding possible absurd results arising from the use of the credit ledger could not be accepted, as the subject case was not concerned with deposits made using the credit ledger.
The Court further held that accepting such a hyper-technical contention would amount to directing the refund of the pre-deposit so that the petitioner could deposit the same amount again as pre-deposit. The petitions were allowed in favour of the assessee.
List of Cases Cited
- Reliance Infrastructure Ltd. v. Union of India — 2023 (69) G.S.T.L. 25 (Bom.) = (2022) 1 Centax 96 (Bom.) — Followed [Para 9]
