Refund allowed of amount mistakenly paid as CGST & SGST instead of IGST if subsequently paid under correct head: HC

Case Details: SBI Cards & Payment Services Ltd. v. Union of India - [2021] 132 taxmann.com 17 (Punjab & Haryana)

Judiciary and Counsel Details

• • Ajay Tewari and Ms. Alka Sarin, JJ.
  • Arvind Datar, Sr. Adv. Tushar Jarwal, Deepak Thackur, Amit Jit Singh Narang and Vrinda Bagaria, Advs. for the Petitioner. 
  • Sunish Bindlish and Gagandeep Singh Malhotra, Advs. for the Respondent.

Facts of the Case

The petitioner had inadvertently paid tax of Rs.108 crores approximately under head CGST instead of IGST. This was the mistake as the petitioner mistakenly considered supply undertaken by it to be intra-State sales instead of inter-State sales. It applied for refund of amount wrongly paid on basis that these transactions were intra-state transactions. The department required it to first make payment under right head IGST and then prayer for refund would be considered. Then the petitioner deposited another amount of Rs.108 cores approximately as tax which was due on inter-state transactions. Even then its plea for refund was rejected primarily on ground that phrase ‘subsequently held’ in section 77 could only apply in a case where an adjudicating authority had actually held whether a transaction was inter-State or intra-State. It filed petition against the same.

High Court Held

The Honorable High Court noted that the amount of tax which was paid by petitioner was not disputed by GST department. There was no claim that any tax was due from petitioner. It had also paid an additional amount of Rs. 108 crores approximately. Moreover, the CBIC has also issued clarification that ‘subsequently held’ would also cover if it this mistake was found by taxpayer. Thus, the petition to grant refund was to be allowed and revenue was directed to refund Rs. 108 crores approximately which was deposited earlier by petitioner towards CGST and SGST along with applicable interest.