Saji s. vs Commissioner, State GST Department Tax Tower, Thiruvananthapuram

The petitioner, a registered dealer, purchased goods from Chennai and had them transported to Kerala. However, during transit, the Assistant State Tax Officer (ASTO) detained the goods for reasons not relevant to the case and issued a notice on September 30, 2018 (referred to as Ext.P3 notice). Following this notice, the consignor paid the tax and penalty, as evidenced by Ext.P4 payment receipt. Notably, this payment was made under the head ‘SGST’.

The petitioner, acting as the consignee and transporter, asserts that the consignor paid the tax and penalty under SGST based on the ASTO’s instructions. However, it is acknowledged that the payment should have been made under the head ‘IGST’. Consequently, the authorities have refused to release the goods, prompting the petitioner to file this writ petition.

The petitioner’s counsel highlights Section 77 of the GST Act and Rule 4(1) of the GST Refund Rules, 2017, particularly emphasizing the proviso appended to the rule. These legal provisions are cited to support the petitioner’s argument that

The case at hand involves a registered dealer who purchased goods from Chennai and transported them to Kerala. During transit, the Assistant State Tax Officer (ASTO) detained the goods for unspecified reasons and issued a notice on September 30, 2018. Subsequently, the consignor paid the tax and penalty mentioned in the notice, as evidenced by a payment receipt. However, this payment was made under the State Goods and Services Tax (SGST) instead of the Integrated Goods and Services Tax (IGST), as required.

The petitioner, acting as the consignee and transporter, asserts that the consignor made the payment under SGST based on the ASTO’s instructions. Nevertheless, the authorities refused to release the goods due to the incorrect tax remittance. Consequently, the petitioner filed a writ petition challenging this decision.

The petitioner’s counsel argues that under Section 77 of the GST Act and Rule 4(1) of the GST Refund Rules, 2017, authorities are empowered to transfer deposits from one tax head to another, thus rectifying such mistakes. The government pleader, however, suggests that the petitioner could pay the amount under IGST and then claim a refund from SGST, although this process might take several months.

After hearing arguments from both sides, the court notes that the facts are undisputed: goods were purchased from Chennai, detained during transit, and the consignor paid the tax and penalty under SGST instead of IGST. Referring to Section 77 of the GST Act, which allows for such transfers, the court deliberates on the appropriate course of action.

The case involves a petitioner, a registered dealer, who purchased goods from Chennai and had them transported to Kerala. During transit, the goods were detained by the Assistant State Tax Officer (ASTO), leading to the issuance of a notice. Subsequently, the consignor paid the tax and penalty, but under the State Goods and Services Tax (SGST) instead of the Integrated Goods and Services Tax (IGST), as required. This led to the authorities refusing to release the goods, prompting the petitioner to file a writ petition.

The petitioner’s counsel argued that the relevant provisions of the Goods and Services Tax (GST) Act and the GST Refund Rules empower authorities to transfer the deposit from SGST to IGST, even if it was initially paid under the wrong head. Conversely, the Government Pleader suggested that the petitioner could pay under IGST and later claim a refund from SGST, though this process might take time.

After hearing both sides, the court acknowledged that the facts were not in dispute: the goods were detained, and the tax and penalty were paid under SGST instead of IGST. Reference was made to Section 77 of the GST Act, which allows for refunds in cases where transactions are reclassified from intra-state to inter-state or vice versa. Additionally, Rule 4(1) of the GST Refund Rules was examined for further clarity.

Ultimately, the court is tasked with resolving the issue of the incorrect tax payment and its implications for the release of the goods.

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