Page 69 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] SHREE NANAK FERRO ALLOYS PVT. LTD. v. UNION OF INDIA 395
5. It is submitted by Learned Counsel for the petitioner that actually
there was no short payment of tax by the petitioner, rather, the payment of tax
was made under the wrong head in CGST, in which there was no liability of that
amount. The tax was paid well within time and the mistake had occurred due to
the fact that it was the early phase of the implementation of the GST regime.
Learned Counsel submitted that it was only a bona fide mistake on part of the pe-
titioner, inasmuch as, in their return GSTR-3B, the petitioner-Company had in-
advertently classified the transaction to be the intra-State supply, whereas it was
actually an inter-State supply. It is submitted by Learned Counsel that in reply to
the letter dated 19-11-2018, a detailed reply had been given to the petitioner-
Company by the respondent No. 2, which has been brought on record by An-
nexure-6 to the writ application, in which it is stated that while filing GSTR-1, the
Company was aware about the nature of the outwards supply at the time of
supply itself, regarding its nature being inter-State. However, while filing
GSTR-3B, the stand which was correctly taken in GSTR-1 had now been changed
and accordingly, the tax and interest liabilities of the petitioner were there, for
the reasons detailed in the said letter. In the said letter, it is also shown that for
making the deposit of the tax under the CGST head, the amount of Rs.
43,61,043/- was deposited by the petitioner in its electronic cash ledger, in cash,
and thereafter from the same electronic cash ledger the tax was paid under the
CGST head. It is submitted by Learned Counsel for the petitioner that had there
been any otherwise intention of the petitioner-Company, the petitioner would
not have deposited the cash in its electronic cash ledger for making the payment
of IGST, as the same amount could have been utilised by the petitioner in the
electronic cash ledger to be used for IGST head as well.
6. Learned Counsel for the petitioner has further drawn our attention
towards Section 77 of the CGST Act, as also Section 19 of the IGST Act, to show
that under Section 77(1) of the CGST Act, if a registered person who has paid the
Central tax, as in the case of the petitioner, on a transaction considered by him to
be an intra-State supply, but which is subsequently held to be inter-State supply,
shall be entitled to the refund of the tax amount so paid, and in the similar man-
ner, it is provided under Section 19(2) of the IGST Act, that the registered person,
who has paid Central tax, as in the case of the petitioner, on a transaction consid-
ered by him to be a intra-State supply, but which is subsequently held to be an
inter-State supply, shall not be liable to pay interest on the amount of the Inte-
grated tax payable. Drawing our attention towards these provisions, Learned
Counsel for the petitioner submitted that under Section 77(1) of the CGST Act,
the petitioner was fully entitled to get the refund of the CGST paid by him
wrongly, and at the same time was not liable to pay any interest, under the pro-
vision of Section 19(2) of the IGST Act.
7. Learned Counsel for the petitioner has further pointed out that un-
der Rule 92 of the Central Goods and Services Tax Rules, 2017, (hereinafter re-
ferred to as the ‘CGST Rules’), there is provision of making adjustments, and ac-
cordingly the tax wrongly paid under the CGST head could be adjusted under
the IGST head as well, which facility was wrongly denied to the petitioner-
Company. Learned Counsel submits that the petitioner is also ready to make
payment of tax under IGST head if so directed, within a week, and to claim the
refund of the tax paid by him under the CGST head, or claim the adjustment
thereof against their future liabilities, but Learned Counsel submits that in no
case interest is payable by the petitioner-Company.

GST LAW TIMES  23rd April 2020  189