2026-VIL-1241-BOM
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SGST High Court Cases

GST - Payment of tax under CGST and SGST heads instead of IGST - Invocation of Section 74 of the CGST Act, 2017 - Petitioner discharged the entire GST under the heads CGST and SGST on amounts received from foreign group companies for warranty support services - Show cause notice issued under Section 74 proposing recovery of GST under the head IGST on the same transaction for the same period - The Revenue contended that the Petitioner should have applied for refund and paid under IGST and misclassification of inter-State supplies as intra-State supplies amounted to suppression - Whether payment of GST under a wrong head is sufficient to invoke Section 74 to recover the amount under the head IGST and to impose penalty - HELD - The deposit of the amount under CGST and SGST was not denied by the Revenue. Considering Section 77 of the CGST Act, Section 19 of the IGST Act and Rule 4(1) of the GST Refund Rules, the Respondents could have transferred the amount from the heads CGST and SGST to the head IGST, and it cannot be said that Section 74 could be invoked - The Hon'ble High Court of Kerala in a similar case held that the officials should have allowed the request to transfer the amount from SGST to IGST - The Hon'ble Supreme Court has held that for a notice under Section 74 the officer must be satisfied that fraud, wilful misrepresentation or suppression led to the mismatch or short payment, and the foundational facts must be evident from the notice itself and not mechanically recited. This was not a case of deliberate attempt to evade tax, and invoking Section 74 was uncalled for - The Order-in-Original is quashed, the petitioner is to apply with proof of payment for transfer of the amount to the head IGST and the Respondents are to transfer it forthwith – The petition is disposed of
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