Wrong GST head payment can be corrected by transfer; detention cannot continue solely for misclassification.

Tax and penalty paid under the wrong GST head may be corrected and transferred to the proper head for the same transaction under the GST scheme, including the adjustment mechanism in Rule 4(1). Where a transaction is treated as inter-State but remittance is made under SGST instead of IGST, the misclassification does not by itself justify continued detention of goods or the vehicle. The authorities must recognise the statutory correction mechanism and effect the transfer to the correct head, with release of the detained goods and vehicle on that basis.

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Issues: Whether tax and penalty remitted under the SGST head, though payable under the IGST head, could be transferred to the correct head and whether the detained goods and vehicle were liable to be released on that basis.

Analysis: The amount had been paid against a transaction that was treated as inter-State in nature, but it was remitted under the wrong tax head. Section 77 of the GST framework contemplates correction where tax is paid under one head instead of another in respect of the same transaction, and the refund mechanism under Rule 4(1) permits adjustment and issuance of an order reflecting such adjustment. On that basis, the authorities were not justified in withholding release merely because the payment had initially been credited to SGST rather than IGST, since the statutory scheme allows correction of the misdirected remittance.

Conclusion: The authorities were directed to release the goods and vehicle forthwith and to ensure transfer of the tax and penalty already remitted under SGST to the IGST head.

Ratio Decidendi: Where tax is paid under the wrong GST head for a transaction, the statutory scheme permits correction by transfer or adjustment to the correct head, and detention cannot be continued solely on account of that misclassification.

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