Case Details: Sona Enterprises Versus State of A.P. (2026) 43 Centax 12 (A.P.)
Judiciary and Counsel Details
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- R Raghunandan Rao & T.C.D. Sekhar, JJ.
- Shri Jyothi Ratna Anumolu, for the Petitioner.
- Shri Santhi Chandra, Sr. Standing Counsel, for the Respondent.
Facts of the Case
The assessee, registered under the CGST Act and the Andhra Pradesh GST Act, purchased scrap from Indian Railways under the reverse charge mechanism. The assessee deposited the GST amount in the electronic cash ledger within the prescribed time, but did not debit the amount towards the tax liability until a post-audit. A show cause notice (SCN) alleged non-payment of tax and proposed interest and penalty by treating the lapse as suppression. The petitioner contended that depositing the GST amount in the electronic cash ledger constituted payment of tax. The matter was placed before the High Court.
High Court Held
The High Court held that the deposit of the GST amount in the electronic cash ledger did not constitute payment of tax under Section 49 of the CGST Act, read with Rules 87 and 88B of the CGST Rules. The Court observed that payment was effected only upon appropriation of the amount to the Government account and that the GST liability stood discharged only on the date of debit from the electronic cash ledger. It, therefore, held that interest was leviable for the delay in the discharge of the GST liability. The Court further held that the question whether the omission amounted to suppression with intent required factual determination and that the composite assessment-cum-penalty order suffered from a defect. Accordingly, the impugned assessment-cum-penalty order was set aside, and the matter was remanded for passing separate period-wise orders after considering the objections.
List of Cases Cited
- RSB Transmissions (India) Ltd. v. UOI — 2022(10) LCX0164 — Referred [Para 16]
- S J Constructions v. Asstt. Commissioner — (2025) 35 Centax 165 (A.P.) = 2025 (102) G.S.T.L. 348 (A.P.) — Referred [Para 13]
- Sona Enterprises v. Asstt. Commissioner of Central Tax — (2026) 39 Centax 145 (A.P.) = 2026 (106) G.S.T.L. 250 (A.P.) — Referred [Para 8]
