CJ Darcl Logistics Limited VS Union Of India

The petitioner is a public limited company operating in the business of providing goods transportation agency (GTA) services under the reverse charge mechanism (RCM) with the GSTIN 20AAACD2086J2ZZ in the State of Jharkhand. The petitioner holds another registration in the same state with GSTIN 20AAACD2086J1Z0, but under the forward charge mechanism (FCM). The need for these two registrations arose from commercial necessity.

The petitioner, a public limited company engaged in providing goods transportation agency (GTA) services under reverse charge mechanism (RCM) with GSTIN 20AAACD2086J2ZZ in Jharkhand, is also registered for the same services under forward charge mechanism (FCM) with GSTIN 20AAACD2086J1Z0. The two registrations were commercially necessary because some customers preferred to discharge liability under RCM while others did not. Under the first registration, the recipient of services bore the tax liability, leaving the petitioner with no output tax liability or input tax credit for GTA services. Conversely, under the second registration, the petitioner regularly paid GST liabilities for each month. The petitioner’s case revolves around an inadvertent, bona fide mistake where they deposited an amount of IGST Rs. 2,39,705, CGST Rs. 83,86,310, and SGST Rs. 83,86,310, totaling Rs. 1,70,12,325 in their electronic cash ledger under the RCM registration instead of the FCM registration. This led to a double payment when they deposited the same amount in the FCM registration ledger to file the GSTR-3B return. Consequently, with the excess balance in the electronic cash ledger, the petitioner filed an application for a refund in FORM GST RFD-01 on 18.04.2021.

The petitioner, a public limited company, operates in the goods transportation agency (GTA) sector using the reverse charge mechanism (RCM) with GSTIN 20AAACD2086J2ZZ in Jharkhand. It is also registered under another GSTIN 20AAACD2086J1Z0 in the state for the same services but under the forward charge mechanism (FCM). The dual registrations were driven by business needs, as some customers preferred to handle RCM liability, while others did not. Under the RCM registration, the output tax liability was on the service recipients, so the petitioner had no output tax liability or input tax credit (ITC) for GTA services. Conversely, under the FCM registration, the petitioner consistently paid GST for each monthly tax period.

The issue arose when the petitioner mistakenly deposited IGST of Rs.2,39,705/-, CGST of Rs.83,86,310/-, and SGST of Rs.83,86,310/-, totaling Rs.1,70,12,325/-, into the electronic cash ledger of the RCM registration instead of the FCM registration. Consequently, the petitioner had to deposit the same amount again into the FCM registration ledger to file the GSTR-3B return, leading to a double payment and excess balance in the cash ledger. Seeking a refund, the petitioner filed FORM GST RFD-01 on 18.04.2021.

During a hearing on 12.01.2023, Mr. S.K. Biswas, Assistant Commissioner, CGST, Jamshedpur, presented certified assessment records for court review. The petitioner faced a show cause notice dated 17th May 2021 regarding the refund application under Section 54 of the CGST Act, 2017, for the RCM registration GSTIN 20AAACD2086J2ZZ. The notice indicated discrepancies between GSTR-1 and GSTR-3B filings from August 2018 to March 2021, where outward supply values and tax amounts were inconsistently reported under ‘4B-REVERSE CHARGE’ in GSTR-1 and ‘outward taxable supplies’ in GSTR-3B. The petitioner was asked to explain these discrepancies within 15 days. The petitioner claims not to have received a formal rejection notice in FORM GSTRFD-08 under Rule 92(3) for the refund application.

The petitioner, a public limited company engaged in the business of providing goods transportation agency (GTA) services under the reverse charge mechanism (RCM) with GSTIN 20AAACD2086J2ZZ in Jharkhand, also holds another registration for the same services under the forward charge mechanism (FCM) with GSTIN 20AAACD2086J1Z0. The two registrations arose from the commercial necessity of the business, as certain customers preferred discharging liability under RCM while others did not. Under the RCM registration, the petitioner had no output tax liability for GTA services and availed no input tax credit (ITC), whereas under the FCM registration, the petitioner regularly paid GST liability each month. The petitioner mistakenly deposited an amount of IGST, CGST, and SGST totaling Rs.1,70,12,325/- into the electronic cash ledger of the RCM registration instead of the FCM registration and subsequently deposited the same amount into the FCM registration’s ledger to file the GSTR-3B return. With a double payment and an excess balance in the cash ledger, the petitioner filed for a refund using FORM GST RFD-01 on 18.04.2021. During the hearing, Mr. S.K. Biswas, Assistant Commissioner, CGST, Jamshedpur, presented certified assessment records for court perusal. A show-cause notice dated 17th May 2021 under Section 54 of the CGST Act, 2017, was issued to the petitioner for refund concerning GSTIN 20AAACD2086J2ZZ. The petitioner claims a communication was sent to his portal to reply within 15 days of receipt of the notice, highlighting discrepancies between GSTR-1 and GSTR-3B filings from August 2018 to March 2021. The department contends that the formal notice in FORM GSTRFD-08 under Rule 92(3) was uploaded on the petitioner’s portal, accessible via login credentials, although the petitioner disputes receiving it. The notice dated 17th May 2021 did not specify reasons for refund inadmissibility, despite indicating a reduction of Rs.1,70,12,325/.

The case involves CJ DARCL Logistics Limited, a company registered for goods transportation services under both reverse charge mechanism (RCM) and forward charge mechanism (FCM) in Jharkhand. Due to customer preferences, they maintain two GST registrations. A mistake led them to deposit Rs. 1,70,12,325 intended for their FCM registration into their RCM registration’s electronic cash ledger. Despite correcting this by redepositing the amount, they sought a refund for the excess deposited. The tax authorities issued notices and rejected their refund claim citing procedural discrepancies, including mismatched tax filings between GSTR-1 and GSTR-3B, and improper dual registration under CGST rules.

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