The GST Appellate Tribunal’s Agra Bench directed interest to a textile mill on a ₹1.18 crore re-credit, holding that neither the ledger used nor paying beyond the pre-deposit defeats the claim.
The GST Appellate Tribunal, Agra, has held that a taxpayer whose demand is set aside in appeal is entitled to interest under Section 56 of the CGST Act, 2017 on delayed restoration of the amount, even if it was paid through the electronic credit ledger and exceeded the pre-deposit. The Bench of Ajeet Singh, Member (Judicial), and Vivek Kumar, Member (Technical), who wrote the order, allowed the taxpayer’s appeal [Om Textiles Mills v. Commissioner of State Tax & Ors., 2026-juristway.com-3247-GSTAT(Agra)-GST].
A demand of ₹1,18,26,516 raised under Section 73 by an order of 5 Jul 2024 was paid in full through the electronic credit ledger and set aside by the first appellate authority. The amount was later re-credited through FORM GST PMT‑03, but interest was refused on the grounds that only the pre-deposit was required and that the re-credit carried no interest.
The Bench found that Section 56 applied, since the adjudicating authority’s own report admitted that sanction was delayed because of office workload. It held that a taxpayer whose credit is debited against a demand is deprived of its use just as one who pays in cash, and the Department pointed to no provision denying interest on that ground.
On the pre-deposit, the Bench read Sections 107(6) and 107(7) together and held that “the statutory pre-deposit is not a ceiling on the amount that an appellant may deposit.” A taxpayer may pay the full demand to avoid further consequences, and doing so is not a waiver of refund or interest if the demand is later set aside.
The order of the first appellate authority was set aside. The appellant is to present the order with its interest calculation to the proper officer, who must examine it within three weeks of the application and pay the interest to the taxpayer’s bank account.
2026-juristway.com-3247-GSTAT(Agra)-GST
