Ocean E Mart Vs State of U.P (Allahabad High Court)
The writ petition before the Allahabad High Court challenged multiple orders passed under the GST framework for the assessment year 2017–18. The petitioner sought quashing of (i) an order revising tax liability under Section 73 read with Section 61 of the GST Act, (ii) an appellate order rejecting the appeal due to non-deposit of disputed tax, and (iii) an order in Form DRC-07 fixing tax liability. The petitioner also sought a direction for settlement of the dispute by adjusting tax already deposited and refunding the excess amount with interest.
The petitioner’s case was that tax which ought to have been paid under the IGST head was mistakenly deposited under the CGST and SGST heads. This error was brought to the notice of both the original authority under Section 73(3) and the appellate authority. Despite this, the authorities treated the case as non-payment of IGST and imposed liability accordingly. The petitioner contended that once CGST and SGST payments were accounted for, there was no shortfall and, in fact, excess tax had been paid, entitling the petitioner to a refund.
The petitioner relied on a Kerala High Court judgment to support the contention that wrong payment under CGST and SGST instead of IGST should not result in denial of credit or refund. On the other hand, the respondents submitted that there was no direct statutory mechanism to transfer tax paid under CGST and SGST to the IGST head, though it was fairly admitted that the petitioner had paid tax under an incorrect head.
