A TO Z CHEMICALS vs SATARUPA DE, KRISHNA GOPAL SAHA, Office of the Commissioner State Tax

IN THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
KOLKATA BENCH
COURT NO. 1
Appeal No. APL/97/KLK/2026

A TO Z CHEMICALS
......... Appellant
Versus

KRISHNA GOPAL SAHA,
ASSISTANT COMMISSIONER OF STATE TAX
LALBAZAR & RADHABAZAR CHARGE, WBGST & ORS.
......... Respondent

In appearance:
For the appellant : Mr. Tarun Kumar Gupta, Ld. Advocate
Shri Sourav Ghosh Chowdhury, Ld. Advocate
For the respondent : Mr. Sandip Roy Chowdhury,
Deputy Commissioner, SGST
CORAM :

Shri Satya Gopal Chattopadhyay : Hon’ble Judicial Member
Shri Anindya Mitra : Hon’ble Technical Member

FINAL ORDER

Date of Hearing : 08.10.2026
Date of Order : 06.11.2026

Per S.G. Chattopadhyay (JM):
[1]. The challenge raised in this appeal is against the order of the
First Appellate Authority confirming the findings of the
Adjudicating Authority regarding availment and utilization of ITC
under CGST and SGST instead of IGST.
[2]. The appellant taxpayer is engaged in trading of chemicals
under the name and style ‘A TO Z Chemicals’ under GSTIN
19AAFFA7664M1ZV who is running his business from 8B, Lal
Bazar Street, Kolkata 700001 in West Bengal.
[3]. A demand was created under Section 73(1) CGST Act, 2017
against the taxpayer and the following demand notice dated
28.02.2023 was served on him:
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“You are therefore, required to
show the cause as to why you should not pay the
amount specified in the table below along with
interest payable and penalty leviable thereon.

Sl. No. Act Tax Interest Penalty
01 IGST (POS-WB) 36,991.98 35,697.26 -
02 CGST 1,72,455.80 1,66,419.90 -
03 WBGST 1,72,455.80 1,79,071.80 -
04 Cess - - -

Please also note that, as per sec.
73(8) of the said Acts, if you pay the said tax along
with interest payable under Section 50 within thirty
days of issue of show cause notice, and inform the
undersigned in DRC – 03, all proceedings in respect
of the said notice shall be deemed to be concluded.
And, in such situation, no penalty is to be paid as this
notice is being issued u/s – 73(1) of the said Acts.”

[4]. In reply to the demand notice, the taxpayer contended that
he mistakenly availed and utilized ITC of a sum of Rs. 1,43,404/-
under CGST and SGST each instead of availing the ITC under
IGST. The taxpayer sought for exemption from the tax liabilities
due to such inadvertent mistake. The matter was taken up by the
Adjudicating Authority. By an order dated 29.05.2023 the
Adjudicating Authority confirmed the demand as follows:
“Regarding excess availed ITC
under the head of CGST and SGST A/R replied that
they inadvertently availed ITC of CGST and SGST
instead of IGST and prayed for pardon as in total ITC
claimed on IGST, CGST and SGST is not exceeding
the tax paid as declared by their supplier.
Regarding ITC reversal with proportionate to exempt
supply A/R is abstained from producing any
explanation/ reconciliation.
The undersigned authority has no authority to adjust
ITC of one tax head to other tax head. Thus, excess
availed ITC under the head of CGST and SGST and
ITC proportionate to exempt supply has to be paid
along with due interest.
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Regarding intimated reversal of ITC Ld. A/R could
not produce any explanation/ reconciliation/
representation with documentary evidences. So, the
undersigned authority presumed that the RTP has
nothing to rebut with documentary evidences against
intimated reversal of ITC.
Under these circumstances in the interest of revenue
the undersigned authority has no other option but to
raise demand u/s 73 of the GST Act, 2017 as per
following computation.
Sl. No. Act Tax Interest Penalty
01 IGST
(POS-
31,689.98 35,697.26 10,000.00
WB)
02 CGST 1,67,455.80 1,66,419.90 16,746.00
03 WBGST 1,67,455.80 1,66,419.80 16,746.00
04 Cess - - -
”
[5]. Aggrieved taxpayer challenged the OIO before the First
Appellate Authority by filing an appeal under Section 107 (1)
CGST Act, 2017. After hearing the parties, the First Appellate
Authority by an Order dated 25.08.2023 decided the appeal and
viewed as under:
“ 1. The taxpayer availed ITC
under CGST and SGST at the rate of Rs. 1,43,011.11/-
each instead of IGST and such ITC availed by the
taxpayer is not adjustable under CGST and SGST and
therefore the taxpayer is liable to reverse such ITC
under CGST and SGST along with interest in terms of
Section 50. Secondly, ITC of a sum of Rs. 4,176/- was
not in accordance with Section 16(4) CGST Act, 2017
and the same was liable to be reversed by the
taxpayer. The First Appellate Authority modified the
OIO and attributed the following liability to the
taxpayer.
(i). So tax payable found as:
Issues Integrated
CGST in Rs WBGST in Rs
Tax in Rs
Excess ITC availed on
0.00 1,43,403.74 1,43,403.74
inward B2B Supply
ITC found reversible
0.00 4,176.00 4,176.00
as ITC uploaded by
supplier after date
prescribed u/s – 16(4)
Total Tax Payable 0.00 1,47,580.00 1,47,580.00

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(ii)So, Penalty u/s 73(9) under the IGST Act becomes Nil.
IGST in Rs CGST in Rs WBGST in Rs
Penalty payable 0.00 14,758.00 14,758.00

(iii) Interest payable
IGST in Rs CGST in Rs WBGST in Rs
Interest payable 0.00 14,2415.00 14,2415.00
”
[6]. Aggrieved by and dissatisfied with the impugned order
passed by the First Appellate Authority, the taxpayer has filed this
appeal under Section 112(1) of the CGST Act, 2017 before this
tribunal for setting aside the impugned order passed by the First
Appellate Authority.
[7]. We have heard Mr. Tarun Kumar Gupta, Ld. Advocate for
the appellant as well as Mr. Sandip Roy Chowdhury, Dy.
Commissioner, SGST for the respondent.
[8]. The main contention of the appellant taxpayer is that the
claim pertains to financial year 2017-18 which is the First year of
the GST regime and GSTR 2A was made available only at the end
of 2018. As a result, the assessee did not have the opportunity to
detect his mistake from GSTR 2A. Otherwise he could have
reversed the ITC availed by him under CGST and SGST heads to
IGST head. Mr. Gupta, Ld. Advocate has vehemently argued that
there is no loss of revenue to the respondent arising from his
availment and utilization of ITC under CGST and SGST instead
of IGST. The mistake occurred due to inadvertence and justice
should not be denied to him for such technical error. In order to
buttress his contention, Mr. Gupta has relied on the Judgment of
the Kerala High Court in the case of Kalleppuram Metals,
represented by its partner Versus Union of India, through the
secretary (Revenue) Ministry of Finance, Department of
Revenue and others reported in 2024 SCC OnLine Ker7751 in
which the Hon’ble High Court of Kerala at Ernakulam has held as
under:
“4. Petitioner is alleged to have wrongly
claimed IGST credit as CGST and SGST credits.
However, in a recent judgment of this Court in
Rejimon Padickapparambil Alex v. Union of India
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[2024 KHC OnLine 7215] , on an almost similar
situation, it was observed that the input tax credit
available in the electronic credit ledger should be
considered as a pool of funds designated for different
types of taxes, such as IGST, CGST and SGST. It was
further observed that the said credit ledger represents
a wallet with compartments for IGST, CGST and
SGST funds and the entire wallet has to be taken into
consideration, instead of individual compartments.
5. The aforementioned decision elucidates
that Section 73 of the GST Act is attracted only when
tax has not been paid or when there is a short payment
or when any amount has been erroneously refunded,
or where any input tax has been wrongly availed or
utilised for any reason.
6. In the instant case, it cannot be stated
that petitioner had wrongly availed input tax credit.
Even going by the orders of the adjudicating authority
the mistake committed by the petitioner was at the
most a technical one, since CGST/SGST was availed
instead of IGST. The alleged excess claim of CGST
and SGST was due to the availability of eligible IGST
credit. Since the GST system treats the electronic
credit ledger as a unified source, there cannot be a
wrongful availing or utilization of input tax credit in
the instant case. There cannot also be any loss of
revenue as well, arising from the utilization of
CGST/SGST instead of IGST.
7. Taking note of the aforesaid, I am of the
view that the impugned order Ext. P-6 is liable to be
set aside and a reconsideration ought to be directed
in the light of the judgment mentioned above.
Accordingly, Ext. P-6 is set aside, and
the third respondent is directed to reconsider the
appeal filed by the petitioner afresh in light of the
judgment in Rejimon Padickapparambil Alex v.
Union of India [2024 KHC OnLine 7215] .
The writ petition is allowed as above.”

[9]. Learned Counsel of the appellant contends that the present
appeal is squarely covered by the ratio decided by the Kerala High
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Court in Kelleppuram Metals (Supra) and as such the appeal
may be allowed.
[10]. Mr. Sandip Roy Chowdhury, Deputy Commissioner, SGST
appearing for the respondent on the other hand contends that the
appeal is devoid of merit because there is no provision under the
CGST Act to grant such relief to the appellant. The AR of the
respondent therefore, urges for dismissal of the appeal.
[11]. The crux of the issue in this appeal is that the taxpayer
availed credit under CGST and SGST instead of IGST and utilized
the same for payment of GST arising out of outward supply. The
First Appellate Authority viewed that the amount of ITC availed
and utilized by the taxpayer under CGST and SGST instead of
IGST is not adjustable and therefore the appellate authority
directed the taxpayer to reverse such ITC along with interest in
terms of Section 50, CGST Act, 2017 and penalty. We have to
examine the merit of the challenge against the decision of the First
Appellate Authority.
[12]. Apart from directing the taxpayer to reverse ITC availed by
him under CGST and SGST instead of IGST, the First appellate
authority under the impugned order also directed the taxpayer to
reverse a sum of Rs. 4176/- which was availed by him in breach
of Section 16(4) CGST Act, 2017.
[13]. In so far as the dispute regarding availment of ITC of the
sum of Rs. 4,176/- each for CGST and SGST is concerned, such
dispute is put to rest after insertion of the non-obstante clause of
sub-section (5) under Section 16 of the CGST Act, 2017. The
taxpayer is absolved of the liability of reversing the said amount
of ITC (Rs. 4,176/- each for CGST and SGST) in terms of the
provision of Section 16(5), CGST Act, 2017.
[14]. Therefore, the only question to be decided by us is whether
the amount of ITC (Rs. 1,43,404.00/- each for CGST and SGST)
inadvertently availed by the taxpayer under the head CGST/SGST
instead of IGST is to be reversed along with interest and penalty
as it has been held by the First Appellate Authority.
[15]. We have examined the case in the light of the Judgement of
the Hon’ble Kerala High Court in the case of M/S.
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KALLEPPURAM METALS(Supra) and the judgement
delivered in REJIMON PADICKAPPARAMBIL ALEX v.
Union of India reported in 2024 KHC Online 7215 which have
been relied upon by the counsel of the taxpayer.
[16]. In the case of M/S. KALLEPPURAM METALS(Supra)
the Hon’ble Kerala High Court in paragraph No. 4 of the Judgment
has also relied on its earlier decision in the case of REJIMON
PADICKAPPARAMBIL ALEX(Supra) and held as under:
“4. Petitioner is alleged to have wrongly
claimed IGST credit as CGST and SGST credits.
However, in a recent judgment of this Court in
Rejimon Padickapparambil Alex v. Union of India
[2024 KHC Online 7215] , on an almost similar
situation, it was observed that the input tax credit
available in the electronic credit ledger should be
considered as a pool of funds designated for different
types of taxes, such as IGST, CGST and SGST. It was
further observed that the said credit ledger represents
a wallet with compartments for IGST, CGST and
SGST funds and the entire wallet has to be taken into
consideration, instead of individual compartments.”
[17]. The Hon’ble High Court was of the view that since the GST
system treats the Electronic Credit Ledger as a unified source,
there cannot be a wrongful availing or utilization of Input Tax
Credit in the instant case. There cannot also be any loss of revenue
as well arising from the utilisation of CGST/SGST instead of
IGST. Having viewed thus, the Hon’ble Kerala High Court
directed the First Appellate Authority to reconsider the appeal filed
by the petitioner afresh in the light of its earlier judgment in
REJIMON PADICKAPPARAMBIL ALEX(Supra) .
[18]. In REJIMON PADICKAPPARAMBIL ALEX(Supra)
the Hon’ble High Court found that the appellant/taxpayer instead
of showing the IGST component in the eligible credit details in
Form GSTR-3B, inadvertently showed the IGST component as nil
and added the bifurcated CGST and SGST components of IGST to
the existing figures showing eligible CGST and SGST credit
which resulted in a mismatch between GSTR 2A and GSTR 3B in
relation to of the taxpayer. The Hon’ble High Court was of the
view that since the mistake committed by the appellant was
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inadvertent and technical one, proceedings initiated under Section
73 was unfounded because the said provision could be attracted
only when it appeared to a proper officer that any tax has not been
paid or short paid or erroneously refunded or where input tax has
been wrongly availed of utilized for any reason.
[19]. In this regard, the Hon’ble High Court observed in
paragraph 8 and 9 as under:
“8. We have deemed it appropriate to
extract the above findings from the order of the
Assistant Commissioner since we find that it not only
represents the correct view of the procedural law in
this regard, but more importantly, demonstrates that
revenue officials, even at the level of Assistant
Commissioner, who are often the first point of contact
between an assessee and the revenue department, are
capable of rendering timely and effective justice in
our country which is known for its huge backlog of
cases. At a time when the justice dispensation system
is looking for ways and means to reduce litigation
generally, and especially in the field of taxation where
delays can affect the nation's economy, orders such as
the one extracted above come as a welcome breath of
fresh air, and are to be duly appreciated and
encouraged. It needs no gainsaying that an
expeditious disposal of cases, especially those
involving procedural aspects of taxation, is the need
of the hour so as to ensure fairness and certainty in
tax administration.
9. We find that on the facts in the instant
case, the notice issued to the appellant, and the
demand confirmed against him, were in proceedings
initiated under Section 73 of the GST Act. The said
provisions are attracted only when it appears to a
proper officer that any tax has not been paid or short
paid or erroneously refunded, or where input tax has
been wrongly availed or utilised for any reason. The
case before us clearly reveals that there has been no
wrong availment of credit, and that the only mistake
committed by the appellant was an inadvertent and
technical one, where he had omitted to mention the
IGST figures separately in Form GSTR 3B. The
mistake was also insignificant because it is not in
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dispute that there was no outward supply attracting
IGST that was effected by him. We therefore set aside
the impugned judgment of the learned Single Judge
and allow the Writ Petition by quashing Ext.P14
order and declaring that the appellant shall not be
seen as having availed excess credit for the purposes
of initiating proceedings under Section 73 of the GST
Act.
Before parting with this case and taking note
of the anxiety and apprehension of the learned
Government Pleader, that the State might be deprived
of its legitimate share of the IGST paid by the
suppliers outside the State in the instant case, we
make it clear that on the respondent State producing
a copy of this judgment, along with a representation
before the GST Council, the GST Council shall issue
necessary directions to resolve the issue by taking
note of the declaration in this judgment.”

[20]. Therefore, we are of the view that the judgments, aforesaid
of the Hon’ble Kerala High Court squarely apply to the present
case. As a result, the impugned order of the First Appellate
Authority is set aside and the case is remanded back to the First
Appellate Authority to reconsider the appeal filed by the taxpayer
afresh in the light of the judgments, aforesaid of the Hon’ble
Kerala High Court. The First Appellate Authority is directed to
complete the whole exercise within a period of three months from
the date of communication of this order after providing a
reasonable opportunity of hearing to the appellant taxpayer. The
appeal is thus disposed of.
SATYA GOPAL
CHATTOPADHYAY

Digitally signed by SATYA GOPAL
CHATTOPADHYAY
Date: 2026.11.06 13:02:28 +05'30'

S.G.Chattopadhyay
Judical Member



Anindya Mitra
Technical Member
ANINDYA MITRA
Digitally signed by ANINDYA MITRA
Date: 2026.11.06 13:24:12 +05'30'
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