The Bombay High Court quashed two demands, and the GST Appellate Tribunal’s Lucknow Bench remanded a third for verification, where tax or credit of IGST was booked as CGST and SGST.

The Bombay High Court and GSTAT Lucknow have held that tax paid, or input tax credit (ITC) taken, under the CGST and SGST heads instead of IGST cannot by itself sustain a demand where the amount is admittedly with the Government. In one case the High Court relied on Section 77 of the CGST Act and Section 19 of the IGST Act to direct a transfer between heads. [DHR Holding India Private Limited v. Union of India & Ors., 2026-juristway.com-3284-HC(Bombay)-GST; Above Ground Level Travco LLP v. Union of India & Ors., 2026-juristway.com-3289-HC(Bombay)-GST; Ram Niwas Sunil Kumar v. Rakhi Singh, Deputy Commissioner, Lucknow, 2026-juristway.com-3292-GSTAT(Lucknow)-GST]

Both writ petitions were decided by Justice M.S. Karnik and Justice Sandesh D. Patil, with Justice Sandesh D. Patil writing the judgments. The appeal was decided by Narendra Kumar, Member (Judicial), and Alok Chopra, Member (Technical).

DHR Holding India. The company had paid ₹7,65,03,407 as CGST and SGST on amounts received from foreign group companies for warranty replacement of parts. A Joint Commissioner nevertheless demanded the same tax as IGST under Section 74 for the same transactions and period, confirming it on 31 Dec 2024. The Revenue argued that the three taxes go to distinct accounts and that the company should have sought a refund and paid IGST.

Reading Section 77, Section 19 of the IGST Act and Rule 4(1) of the GST Refund Rules, the Bench held that the respondents could have transferred the amount to the IGST head. Relying on Saji S. v. Commissioner, State GST (2018) and Tata Steel Limited v. Union of India (2026), it held there was no deliberate attempt to evade tax and invoking Section 74 was uncalled for. The order was quashed. The company is to apply with proof of payment within three weeks of 30 Oct 2026, after which the amount is to be transferred forthwith; the Department may recover anything due beyond ₹7,65,03,407, and the company may appeal regarding ₹11,36,447.

Above Ground Level Travco. IGST credit of ₹8,11,912 on a March 2019 invoice was recorded as CGST and SGST in GSTR‑3B and corrected in the September 2019 return. An SCN and an ex parte order were only uploaded on the portal, the appeal was rejected as time-barred, and a notice under Section 79(1)(c) directed the bank to pay ₹16,25,258. Following T.S. Lines India Pvt. Ltd. v. State of Maharashtra (2024) and Abracadabra India v. Union of India (WP/2968/2024), and noting the bona fide rectification, the Bench quashed the SCN, both orders and the recovery notice.

Ram Niwas Sunil Kumar. A Lucknow grocery and spice trader had reported IGST credit of ₹6,71,751.50 under CGST and SGST in its 2018-19 returns. Applying Circular No. 192/04/2023-GST as explained in Rejimon Padickapparambil Alex v. Union of India (W.A. No. 54 of 2024), which treats the credit ledger as a single wallet, the Bench held that the demand could not stand merely because credit sat under the wrong head, and remanded for verification. It upheld the denial of ITC of ₹1,67,790 on purchases from an Assam supplier that filed nil returns, as Section 16(2)(c) was not met.

2026-juristway.com-3284-HC(Bombay)-GST | 2026-juristway.com-3289-HC(Bombay)-GST | 2026-juristway.com-3292-GSTAT(Lucknow)-GST