Deposit in Electronic Cash Ledger Is Not Discharge of Tax Liability — Interest Under Section 50 Runs Until Debit Through GSTR-3B Filing: GSTAT Raipur Bench Delivers 70-Paragraph Landmark Ruling, Declines Eicher Motors and Arya Cotton, Holds 2024 Rule 88B Proviso Is Prospective

The GSTAT Raipur Bench has delivered a landmark 70-paragraph ruling dismissing three connected appeals by a manufacturer of iron and steel products, holding that mere deposit or credit of sufficient amounts in the Electronic Cash Ledger (ECL), even if made on or before the statutory due date, does not constitute payment of the particular return liability for the purpose of terminating interest under Section 50(1), and that interest continues until the ECL is debited in discharge of the return liability at the time of filing GSTR-3B. The ruling by Members Chandra Bhushan Singh (TM) and Pradeep Kumar Vyas (JM) in APL/171, 172, 173/RPR/2026 (Shri Shyam Ispat India Pvt. Ltd., decided 29.09.2026) follows the Jharkhand HC’s RSB Transmissions and the Patna HC’s Sincon Infrastructure, and respectfully declines to follow the Madras HC’s Eicher Motors and the Gujarat HC Division Bench’s Arya Cotton Industries, creating the most detailed GSTAT analysis of the divergent High Court positions on this issue.

On the statutory scheme, the Tribunal held that Section 49(1) uses the word ‘deposit’ for incoming amounts credited to the undifferentiated ECL, while Section 49(3) separately authorises the amount ‘available’ to be ‘used for making payment’ — this distinction is not accidental. Rule 85(3) identifies debit of the ledger as the statutory act by which a return liability is discharged. The retrospective proviso to Section 50(1) itself describes the relevant portion as tax ‘paid by debiting the electronic cash ledger’, not as tax ‘deposited’. Rule 88B(1), retrospectively operative from 01.07.2017, couples the cash-ledger portion with the ‘period of delay in filing’ the return. On the 2024 amendment, the Tribunal held that the proviso inserted in Rule 88B(1) by Notification No. 12/2024-CT dated 10.07.2024 (excluding continuously available ECL balances from interest) took effect from that date with no retrospective deeming language, unlike Notification No. 14/2022-CT which expressly deemed Rule 88B inserted from 01.07.2017. The 53rd GST Council meeting agenda itself proceeded on the understanding that ECL deposit did not amount to discharge, and proposed the amendment as a substantive relief.

The Tribunal also held that the admitted non-grant of personal hearing under Section 75(4) was established as a breach, but declined to remand, applying the Supreme Court’s Dharampal Satyapal, Escorts Farms and Sudhir Kumar Singh principles: where the factual record is complete and undisputed, the respondent has admitted continuous head-wise sufficiency, no additional material could be placed upon remand, and the surviving controversy is a pure statutory question within the Tribunal’s competence, remand would be an empty formality rather than restoration of a lost substantive opportunity. The aggregate disputed interest of Rs. 28,67,207 across three financial years was sustained.

- 2026-juristway.com-2771-GSTAT(Raipur)-GST  |  GSTAT Raipur Bench  |  APL/171, 172 & 173/RPR/2026  |  29.09.2026