Input tax credit under GST is not wrongly availed merely because it was recorded under CGST and SGST instead of IGST.

Input tax credit under GST is not treated as wrongly availed merely because it was booked under CGST and SGST heads instead of IGST, where the credit was otherwise available and used for GST payment. The Kerala HC noted that the credit ledger operates as a common pool with separate heads, and the impugned Section 73 orders had not applied the correct legal position. The orders were set aside and the matter was remanded for fresh consideration in light of the governing principle.

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Issues: Whether the orders passed under Section 73 of the Central Goods and Services Tax Act, 2017, treating the input tax credit as wrongly availed because it was taken under the CGST and SGST heads instead of IGST, were liable to be set aside and reconsidered.

Analysis: The credit ledger under the GST regime was treated as a pool of funds with separate compartments for IGST, CGST and SGST. Since the credit was available and utilised for GST payment, the circumstance that it was reflected under CGST and SGST rather than IGST was held not to justify the conclusion that there had been a wrong availment of credit. The impugned orders had not applied the governing legal position on this issue and therefore required fresh consideration.

Conclusion: The orders were set aside and the matter was directed to be reconsidered afresh in the light of the applicable legal principle.

Final Conclusion: The petitioner obtained relief by way of quashing of the impugned orders and a remand for fresh decision on the input tax credit issue.

Ratio Decidendi: Where input tax credit is otherwise available and has been utilised for GST payment, mere booking of the credit under a different GST head does not by itself justify treating the credit as wrongly availed for the purpose of recovery proceedings.

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