Electronic Cash Ledger Deposits as Legitimate Tax Payments!

Return of Eicher Motors Ltd. v. Union of India Part - 2?

The recent judgment echoes a landmark decision akin to the prior rulings in Eicher Motors Ltd. v. Union of India (1999 taxmann.com 1769), establishing that input tax credit is an absolute and vested right.

In the current case, the Madras High Court emphasized the significance of Rule 87(7) and (8), specifically addressing the crediting of amounts to the Electronic Cash Ledger. The court highlighted that upon receiving the challan identification number from the collecting bank, the amount is initially credited to the government. Subsequently, it is deemed to be credited to the Electronic Cash Ledger, as outlined in Explanation (a) to Section 49(11) of the Act.

The judgment underscores that the crediting process to the Electronic Cash Ledger is automatic. Once the GSTR-3B is filed, the amount seamlessly appears in the electronic cash ledger. It's crucial to note that this mechanism serves accounting purposes exclusively and does not carry additional implications. In essence, the judgment reinforces the notion that money deposited in the Electronic Cash Ledger is tantamount to tax paid.

**W.P.Nos.16866 & 22013 of 2023 and W.M.P.No.32200 of 2023

Our View

1. The issue at hand has previously been addressed by the Hon'ble Gujarat High Court in the case of Vishnu Aroma Pouching P. Ltd. v. Union of India (R/Special Civil Application No. 5629 of 2019, dated November 14, 2019). This decision was subsequently upheld in Union of India v. Vishnu Aroma Pouching P. Ltd. (SLP Civil Diary No. 1434 of 2021, Order dated June 29, 2021). In this instance, the taxpayer had deposited the tax amount into its electronic cash ledger but faced technical glitches preventing the filing of the GSTR-3B return.
2. The Hon’ble High Court in that case nullified the interest liability and considered the amount credited in the electronic cash ledger as fulfilling the tax obligation.
3. We have consistently referenced this judgment about interest levies, and the recent judgment, drawing inspiration from the aforementioned case, provides further relief. It appears that Eicher Motor Limited. is making a mark with these significant legal precedents :)At TaxTru, our dedicated team of professionals is committed to addressing your business's unique needs and ensuring compliance with all relevant tax regulations. From managing routine compliance matters to providing comprehensive solutions for litigation management, we are here to support your business at every step. If you require assistance or have any indirect tax-related concerns, please do not hesitate to contact us at 9953357935 or via email at [email protected].