The petitioner was in the business of renting out motor vehicles for use in passenger transportation to different people for commercial purposes who were located in different states. During inspection, it was discovered that IGST was paid in place of CGST and SGST in a single transaction. The assessee was given a show cause notice by the department to pay the CGST and SGST. It filed a writ petition asking for the department’s show-cause notice to be quashed and for further instructions regarding the adjustment of IGST paid toward CGST and SGST.
The petitioner mistakenly paid IGST rather than CGST and SGST and mapped the State of Telangana as the State of Andhra Pradesh in its IT system, according to the Honorable High Court. According to Section 19(1) of the IGST Act, a registered person who paid IGST on a supply that he initially believed to be an interstate supply but was later determined to be an intrastate supply is entitled to a refund of that amount in the manner and subject to the conditions that may be prescribed.
Because there was no provision for the adjustment of incorrectly paid IGST with CGST and SGST, as was asserted, the assessee might submit a separate application for the refund of IGST but not for IGST adjustment with CGST and SGST. The petitioner was therefore ordered by the court to abide by the show cause notice, pay the CGST and SGST, and submit an application for the refund of the IGST that was mistakenly paid under section 19(1) of the IGST Act.
