Electronic Cash Ledger Deposit is Equivalent to Government Deposit for Bail
The Gujarat High Court ruled that an amount debited by a taxpayer to their Electronic Cash Ledger (ECL) under the Goods and Services Tax (GST) system is considered a valid deposit to the government exchequer, satisfying a bail condition. Crucially, the court held that filing Form GST DRC-03 (Voluntary Payment of Tax) is not mandatory for the payment to be deemed complete.
Key Points of the Judicial Ruling
- ECL Credit is Government Deposit: The court affirmed that once funds are deposited into the Electronic Cash Ledger and successfully debited, they are deemed to have reached the Government account. This action fully discharges the taxpayer’s liability or condition, such as a bail requirement to deposit a specific sum.
- DRC-03 Not Mandatory: The ruling rejected the Revenue Department’s argument that the payment was invalid because it was not made using Form GST DRC-03. The court emphasized that the payment method (ECL debit) is secondary to the fact that the full amount was credited to the government exchequer.
- Discharge of Liability: Referencing Section 49 of the CGST Act, the court reaffirmed that the liability stands discharged on the date the tax is deposited through a challan and credited to the government account, regardless of whether a subsequent declaration form (like DRC-03) is used.
- Bail Condition Fulfilled: The decision provides significant relief to the accused, confirming that their deposit through the ECL was legitimate and satisfied the bail condition, thereby preventing the Revenue from seeking the cancellation of their bail on technical grounds.
Source :- Judgement