Dhr Holding India Private Limited vs Union Of India

CNR No : HCBM020068292025

WP-1214-2025.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1214 OF 2025
)
)
)
)
).....Petitioner
DHR Holding India Private Limited
rd
3 Floor, B Wing, Art Guild House,
Lal Bahadur Shastri Marg,
Near Phoenix Market City
Kurla West, Mumbai 400 070.
Versus
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
).....Respondents
.....
Mr. Parth Parikh i/b Economic Laws Practice, for the Petitioner.
1. Union of India
through The Joint Secretary,
Department of Revenue,
Ministry of Finance,
Room No.46, North Block,
New Delhi – 110 001.
2. State of Maharashtra
through the Government Pleader
PWD Building, High Court,
Mumbai – 400 032.
3. Commissioner of CGST & Central Excise
Mumbai East Commissionerate,
th
9 Floor, Lotus Info Centre, Near Parel Station
Parel (East), Mumbai 400 012.
4. Joint Commissioner of CGST & Central Excise
Mumbai East Commissionerate,
th
9 floor, Lotus Info Centre, Near Parel Station
Parel (East), Mumbai 400 012.
Ms.Maya Majumdar a/w Ms. Niyati Mankad, for the Respondent
Nos.1, 3 and 4.
Smt. Jyoti Chavan, Addl.G.P a/w Mr. Himanshu Takke, A.G.P for the
Wakodikar
1/11
Digitally signed
by RUPALI
RAJESH
WAKODIKAR
Date:
2026.11.05
10:53:12 +0530
RUPALI
RAJESH
WAKODIKAR
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
Respondent – State.
..…
CORAM : M. S. KARNIK &
SANDESH D. PATIL, JJ.
th
DATE : 30 OCTOBER, 2026
JUDGMENT [PER SANDESH D. PATIL, J.] :-
1. By the present petition, the petitioner is challenging the Order-
in-Original dated 31/12/2024 (Exhibit "A" to the petition).
2. The case of the petitioner is that the petitioner is engaged in
the business of facilitating the sale of medical equipment by the
overseas suppliers to buyers in India and providing marketing,
distribution, and support services to the group companies located
outside India.
3. The petitioner had paid an amount of Rs. 7,65,03,407/- under
the heading ‘CGST’ and ‘SGST’ on the amount received from the
foreign group companies towards replacement of parts from
inventory under warranty support services supplied to the foreign
group companies under the sale commission agreement. Inspite of
the fact that the petitioner had paid the aforesaid amount of
7,65,03,407/-, yet a show-cause notice was issued by respondent No.
Wakodikar
2/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
4 on 16/07/2024 under Section 74 of the Central Goods and Service
Tax Act, 2017 (‘CGST Act’ for short) for recovery of the GST under
the head ‘IGST’ on the same transaction for the same period. On
31/12/2024, the respondent No.4 passed order thereby confirming
the demand of ass per the show-cause notice. It is this order which is
challenged by the petitioner in the present petition.
4. Heard the learned counsel appearing for the respective parties.
Perused the documents on record.
5. The learned Counsel appearing for the petitioner argued that
the demand of ‘IGST’ is without jurisdiction. He submitted that,
undisputedly, petitioner had discharged the entire GST of Rs.
7,65,03,407/- under the head ‘CGST’ and ‘SGST’ on the amount
recovered from his clients. Although the said amount was paid
under the head ‘CGST’ and ‘SGST’, the respondent No.4 has sent the
notice under Section 74 of the CGST Act for the same transaction for
the same period under the heading ‘IGST’. He submitted that under
the scheme of GST Act, a supply could either be intra-State supply
under the head ‘CGST’ and ‘SGST’ or could be an inter-State supply
which is subject to GST under the head ‘IGST’. He submitted that in
Wakodikar
3/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
both the cases, GST at the same rate is applicable on the same
taxable value. He submitted that the amount of GST payable in
either case remains the same.
6. Learned Counsel further submitted that since he has already
paid an amount of Rs. 7,65,03,407/-, there are no revenue
implications, inasmuch as, the IGST, if collected, would have been
apportioned equally between Center and State. He invited our
attention to Section 17 of the IGST Act.
7. He submitted that the Kerala High Court in the matter of Saji
1
S. vs. Commissioner, State GST has taken a view that the GST
department could internally transfer the SGST to the IGST account
instead of initiating recovery proceedings against the assessee who
had paid the entire tax amount. He submitted that, in any case,
passing of order under Section 74 of the CGST Act is ex-facie illegal,
inasmuch as, there was an absence of element of fraud or
suppression. He stated that thus there is a fundamental jurisdictional
error committed by the petitioner.
8. The learned Counsel appearing for the revenue, Ms. Maya
1 {(2018) 19 GSTL 385 Ker}
Wakodikar
4/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
Mazumdar, on the other hand, stated that the argument of the
petitioner that discharge of ‘CGST’ and ‘SGST’ absolves it of ‘IGST’
liability is denied as it is fundamentally an unsustainable proposition.
She submitted that ‘CGST,’ ‘SGST’, and ‘IGST’ are credited to distinct
sovereign accounts. She contended that department is not under any
legal obligation to adjust ‘CGST’ and ‘SGST’ paid against ‘IGST’
demand.
9. Learned Counsel for the revenue further stated that since the
petitioner systematically misclassified inter-State supplies as intra-
State supplies and improperly claimed zero rating on non-export
transactions in its statutory returns (GSTR-1 and GSTR-3B), it was
suppression as contemplated under Explanation 2 to Section 74. She
stated that even otherwise, there is an alternate remedy available
and hence the petitioner has to resort to the same.
10. Heard the learned Counsel appearing for the parties. Perused
the documents on record.
11. At the outset, it is made clear that the petitioner has discharged
GST of Rs. 7,65,03,407/- under the head ‘CGST’ and ‘SGST.’ The
Wakodikar
5/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
respondents have not denied this fact. Their only contention is that
the petitioner should have deposited the GST Amount under the
head ‘IGST’. The only contentious issue is whether such payment
would amount to payment made to the government for disbursement
of the GST and whether, merely because the said payment of GST
was made under wrong heading in itself was sufficient to invoke
Section 74 of the CGST Act to recover the amount under the heading
‘IGST’ and to impose penalty upon the petitioner.
12. It is pertinent to note that in the affidavit which is filed by the
revenue, the factum of deposit of the amount of Rs,7,65,03,407/- in
the ‘CGST’ and ‘SGST’ heading is not denied by the respondents -
revenue.
13. The learned Counsel for the Revenue stated that the petitioner
should have applied for refund of the said amount of
Rs.7,65,03,407/- and ought to have paid the same to the respondent
under the heading ‘IGST’. She submitted that the respondents were
not duty-bound to adjust the same. For this purpose, it is necessary
to refer to Section 77 of the CGST Act, which reads as under:
Wakodikar
6/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
“Section 77: Tax wrongfully collected and paid to Central
Government or State Government:
(1) A registered person who has paid the Central tax and
State tax or, as the case may be, the central tax and the
Union territory tax on a transaction considered by him to
be an intra-State supply, but which is subsequently held
to be an inter-State supply, shall be refunded the amount
of taxes so paid in such manner and subject to such
conditions as may be prescribed.
(2) A registered person who has paid integrated tax on a
transaction considered by him to be an inter-State supply,
but which is subsequently held to be an intra-State
supply, shall not be required to pay any interest on the
amount of central tax and State tax or, as the case may
be, the central tax and the Union territory tax payable.”
14. It will also be imperative to consider the provisions of Section
19 of the IGST Act, which reads as under:
“Section 19. Tax wrongfully collected and paid to Central
Government or State Government. -
(1) A registered person who has paid integrated tax on a
supply considered by him to be an inter-State supply, but
which is subsequently held to be an intra-State supply,
shall be granted refund of the amount of integrated tax
so paid in such manner and subject to such conditions as
may be prescribed.
(2) A registered person who has paid central tax and
State tax or Union territory tax, as the case may be, on a
transaction considered by him to be an intra-State supply,
Wakodikar
7/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
but which is subsequently held to be an inter-State
supply, shall not be required to pay any interest on the
amount of integrated tax payable.”
15. Further, Rule 4(1) of the GST Refund Rules is also necessary to
be considered in this context, Rule (4) of the GST Refund Rules reads
as under:
“4. Order sanctioning refund
(1) Where, upon examination of the application, the
proper officer is satisfied that a refund under sub-section
(5) of section 54 is due and payable to the applicant, he
shall make an order in FORM GST RFD-06, sanctioning
the amount of refund to which the applicant is entitled,
mentioning therein the amount, if any, refunded to him
on a provisional basis under sub-section (6) of section
54, amount adjusted against any outstanding demand
under the Act or under any existing law and the balance
amount refundable:
PROVIDED that in cases where the amount of refund is
completely adjusted against any outstanding demand
under the Act or under any existing law, an order giving
details of the adjustment shall be issued in Part A of
FORM GST RFD-07.”
16. Taking into consideration the aforesaid provisions of law, the
respondents could have transferred the amount under the head
‘CGST’ and ‘SGST’ to the head ‘IGST’. In no event, it can be said that
this is a case where Section 74 of the CGST Act could be invoked.
Wakodikar
8/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
17. The Kerala High Court in the case of Saji S.(supra) had
occasion to consider the same issue. The Single Judge of the Kerala
High Court had held that if such an amount was paid under wrong
heading, the respondent officials should have allowed the petitioner's
request to get the amount transferred from the head ‘SGST’ to the
head ‘IGST’.
18. As far as the issue of issuance of notice under Section 74 of the
CGST Act is concerned, the Hon’ble Supreme Court in the matter of
2
Tata Steel Limited vs. Union of India has held as under:
“11. At the outset we have to notice that the proceedings
under section 73/74 can be initiated only on the
satisfaction of the assessing officer. Even if
observations/objections are made on audit, the assessing
officer should enter his satisfaction before a notice is
issued. In so far as a notice under section 74, the
satisfaction should be not only of mismatch of ITC and
short payment of tax having occurred, as is alleged in
this case, the Officer should be satisfied that either
fraud/wilful misrepresentation/suppression had led to
such mismatch or short payment of tax.
14. It is not mere lip service to the provisions that is
intended when an extended limitation period is provided
for recovering an excess benefit availed, short payment
or excess refund, from the assessee, especially when the
. 2026 SCC OnLine SC 1702
2
Wakodikar
9/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
allegation is of fraud/wilful
misrepresentation/suppression. The foundational facts
which led to the inference arrived at of fraud/wilful
misrepresentation/suppression should be evident from
the notice itself. The mere employment of such words
will not indicate an application of mind, upon which
alone the satisfaction can be arrived at. The words are
not to be mechanically recited in the notice to enable
recovery outside the normal limitation provided under
the statute.”
(emphasis supplied by us)
19. This is not a case where there was a deliberate attempt to
evade tax. In such circumstances, invoking Section 74 of the CGST
Act was uncalled for. In these premises, we are inclined to set aside
the Order-in-Original No. ME/JC/VR/255/GST/2024-25.
20. Before parting with the judgment, we must note that we have
only decided about the adjustment of the GST paid under wrong
heading and that we have not decided upon the quantum of the
‘IGST’ payable. The department is free to take such appropriate
proceedings as are required or initiate such action as is prescribed in
law for the purpose of recovering any amount over and above
Rs.7,65,03,407/-, if it is due and payable by the petitioner.
21. In light of the aforesaid observations, we dispose of the petition
Wakodikar
10/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13

WP-1214-2025.doc
by passing the following order:
ORDER
(i) The impugned Order-in-Original No.
ME/JC/VR/255/GST/2024-25 is quashed and set aside.
(ii) The petitioner shall file a application along with
proof of payment of Rs.7,65,03,407/- for transfer of the
amount of Rs.7,65,03,407/- of GST paid by the
petitioner under the head ‘CGST’ and ‘SGST’ to the head
‘IGST’ within a period of three weeks from today. So far
as amount of Rs.11,36,447/- is concerned it is open for
the petitioner to prefer an appeal before the competent
forum.
(iii) As and when the said application is preferred, the
respondent shall forthwith transfer the said GST amount
from the head ‘CGST’ and ‘SGST’ to the head ‘IGST’.
22. Petition is disposed of accordingly.
(SANDESH D. PATIL, J.) (M. S. KARNIK, J.)
Wakodikar
11/11
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 10:58:13
Powered by TCPDF (www.tcpdf.org)