2026-VIL-314-GSTAT-KOL
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SGST Tribunal

GST - Demand under Section 73 of the CGST Act, 2017 for ITC availed and utilised under CGST and SGST instead of IGST - Appellant inadvertently availed credit under the CGST and SGST heads instead of IGST in the first year of the GST regime, when the auto-populated statement became available only later - Adjudicating Authority confirmed the demand holding that credit of one tax head cannot be adjusted against another, which was upheld by the FAA with interest and penalty - Appellant contended that there was no loss of revenue and that justice should not be denied for a technical error, relying on the High Court decisions - Whether the ITC inadvertently availed under CGST and SGST instead of IGST is to be reversed along with interest and penalty - HELD - The Kerala High Court in Kelleppuram Metals held that the electronic credit ledger is a pool of funds with compartments for IGST, CGST and SGST, to be taken as a unified source, so that no wrongful availing or utilisation arises and no loss of revenue results from utilising CGST and SGST instead of IGST, and that Section 73 is attracted only where tax is not paid or short paid, erroneously refunded or input tax is wrongly availed or utilised. A mistake which is inadvertent and technical does not justify proceedings under Section 73. These judgments squarely apply to the present case - The order of the FAA is set aside and the matter is remanded to the FAA to reconsider the appeal afresh in the light of those judgments after affording a reasonable opportunity of hearing to the Appellant – The appeal is disposed of - Reversal of a small portion of ITC held to be availed in breach of Section 16(4) of the CGST Act, 2017 - FAA directed the Appellant to reverse ITC pertaining to invoices uploaded by the supplier after the prescribed date - Whether the Appellant is liable to reverse such ITC - HELD - The dispute stands put to rest after the insertion of the non-obstante clause in sub-section (5) of Section 16 of the CGST Act - The Appellant is absolved of the liability of reversing the said amount of ITC under CGST and SGST in terms of Section 16(5).
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