HC Quashes Demand Order in Case Where IGST Liability Was Discharged Under CGST And SGST Heads:

HC Quashes Demand Order in Case Where IGST Liability Was Discharged Under CGST And SGST Heads The Allahabad High Court held that the company wrongly paid IGST as CGST and SGST without intention. Since the full tax was already paid, the demand was quashed, and the matter was remanded to adjust taxes correctly and grant a refund if due promptly. A company named Ocean E Mart has filed the present appeal in the Allahabad High Court, challenging an order dated January 27, 2024, issued by the Deputy Commissioner, State Tax, Lucknow, under Section 73 read with Section 161 of the GST Act. The case is related to the assessment year 2018-19. The dispute was related to the payment of GST under the wrong tax head.

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The petitioner claimed that the tax that needed to be paid under the head of 'IGST' was mistakenly paid under the heads of CGST and SGST. The petitioner had paid a total tax amounting to Rs. 14,163,327.46 under CGST and SGST. During the proceedings, the mistake was already reported to the GST authorities under Section 73 of the GST Act. However, the GST department still considered the non-payment of IGST and increased the tax liability of the petitioner, despite the total tax paid by the petitioner being more than required. He further submits that he is actually liable to get a refund of the money The petitioner cited an earlier judgment of the Kerala High Court in a case of Saji S, Proprietor, and others. The petitioner claims that no such mechanism exists using tax deposited under the head of SGST and CGST, which can be transferred to IGST. However, it is clearly visible that the complete tax amount has been paid from the side of the petitioner, but under the wrong head.

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When the court analysed the facts of the case, it observed that the mistake made was not intentional and the petitioner had already paid the entire tax, even more than actually required. In conclusion, the high court quashed the impugned orders and remanded the case to the tax authorities for fresh consideration and directed the authorities to this time account for the tax deposited under SGST and CGST into the head of IGST. If any refund is liable to be paid to the petitioner, then immediately release the complete refund amount.