Wrong GST payment to Railways can be regularised, with remittance to proper authorities and input tax credit restored.

GST paid to Railways under a contract, instead of being remitted by the recipient on reverse charge to the proper CGST and SGST authorities, was treated as a mistaken payment capable of regularisation. On the admitted facts, there was no attempt at tax evasion, the authorities accepted that the amount had been wrongly deposited, and the Court directed remittance to the correct tax authorities with corresponding input tax credit to the petitioner. In these unusual circumstances, interest and penalty were indicated as not ordinarily warranted. The petitioner therefore obtained directions for regularisation of the payment and credit adjustment.

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Issues: Whether GST paid by the petitioner to Railways instead of directly to the tax authorities on a reverse charge basis had to be regularised by directing remittance to the proper CGST and SGST authorities, with consequential input tax credit to the petitioner.

Analysis: The dispute arose from the petitioner having paid the GST component to Railways under the contract, although the tax was payable by the recipient on reverse charge basis directly to the concerned authorities. The admitted facts showed that the petitioner had not attempted any tax evasion and had made a mistaken payment to Railways. The authorities also acknowledged that the amount had been wrongly deposited and could be regularised, and the Court directed that the amount be paid to the proper tax authorities, with the petitioner to receive input tax credit. The Court also indicated that interest and penalty should not ordinarily be imposed in the unusual facts of the case.

Conclusion: The petitioner succeeded, and directions were issued to ensure regularisation of the wrongly paid GST through payment to the proper authorities and corresponding input tax credit.

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