Top Stories Supreme Court Upholds Gujarat HC Verdict: Pre-Deposit via Electronic Credit Ledger Valid for GST Appeals, Rejects Dept’s SLP [Read Judgement] The Supreme Court upheld the Gujarat High Court ruling that pre-deposit through the Electronic Credit Ledger is valid under GST, dismissing the Department’s SLP By Kavi Priya – On May 19, 2025 6:54 pm – 2 mins read In a landmark decision, the Supreme Court of India has dismissed the Special Leave Petition (SLP) filed by the Union of India and CGST authorities against the Gujarat High Court’s ruling in the case of Yasho Industries Ltd vs Union of India & Ors.
The bench comprising Justice B.V. Nagarathna and Justice Satish Chandra Sharma, on May 19, 2025, condoned the delay but dismissed the SLP on merits, effectively upholding the Gujarat High Court’s ruling that payment of pre-deposit via the Electronic Credit Ledger (ECL) is valid and sufficient compliance under Section 107(6)(b) of the Central Goods and Services Tax (CGST) Act, 2017. Read More: UAE Resident’s Gold, 3 iPhones Seized: Delhi HC Clears Release iPhones on Redemption and Storage Fee Payment [Read Order] The matter originated when Yasho Industries Ltd, a chemical manufacturing and export company, was directed by the CGST appellate authority in Surat to pay a mandatory pre-deposit via Electronic Cash Ledger (ECL) for filing an appeal. However, the company had already deposited the required 10% of the disputed tax amount, Rs. 3.36 crore, through the Electronic Credit Ledger using Form GST DRC-03. Despite this, the department refused to consider the credit ledger payment as valid, which led the company to challenge the demand before the Gujarat High Court. The UAE Tax Law Is Evolving — Stay Ahead Before Clients Find Someone Who Already Is., Enroll Now
Read More: Imposition of Differential Duty on Tempered Glass Despite Prior Payments: Delhi HC Directs AA to Rectify Order [Read Order] The Division Bench of the Gujarat HC comprising Justice Bhargav D. Karia and Justice D.N. Ray held that there is no restriction in the CGST Act that mandates that pre-deposit must be paid only through the cash ledger. Citing Section 49(4) of the CGST Act and CBIC Circular dated July 6, 2022, the court emphasized that output tax liabilities, including amounts due from adjudication can be paid using the Electronic Credit Ledger. The High Court quashed the department’s direction to make the payment through the cash ledger and directed that the appellate authority must hear the matter on merits, considering the credit ledger payment as a valid pre-deposit under Section 107(6)(b) of the CGST Act. The department appealed this order in the Supreme Court SLP(C) No. 014841/2025, Diary No. 17547/2025. The Supreme Court has now upheld the Gujarat High Court’s interpretation. The detailed order is awaited, and the dismissal effectively affirms that credit ledger payments are legally acceptable for pre-deposit purposes