Input Tax Credit utilisation across tax heads does not itself prove wrongful availment; assessment set aside and remanded.

Utilisation of Input Tax Credit from the IGST head under the CGST and SGST heads was held not, by itself, to constitute wrongful availment warranting penalty, because the electronic credit ledger operates as distinct compartments for each tax head. The assessment order imposing liability for alleged excess utilisation of credit was set aside, and the matter was remitted for fresh consideration by the proper officer after hearing the taxpayer. The court also noted the prolonged pendency of the statutory appeal and exercised writ jurisdiction to avoid further delay.

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Issues: Whether the assessment order imposing liability for alleged excess utilisation of Input Tax Credit was liable to be set aside and the matter remitted for reconsideration.

Analysis: The dispute arose from the petitioner's utilisation of Input Tax Credit by drawing from IGST credit under the CGST and SGST heads. The Court applied the earlier view that the electronic credit ledger functions as a wallet with distinct compartments for IGST, CGST and SGST, and that such utilisation, by itself, does not amount to wrongful availment of credit warranting penalty. Since an appeal was already pending but had not been disposed of for a considerable period, the Court exercised writ jurisdiction to avoid further delay and directed fresh consideration by the proper officer after giving an opportunity of hearing.

Conclusion: The assessment order was set aside and the matter was remitted for reconsideration in accordance with law, in favour of the petitioner.

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