Depositing GST on the wrong head

[Balakrishna]

Dear Sirs, 

1. During 2018-19 Rs. 19,000 tax was wrongly deposited as IGST instead of CGST & SGST

2. Business was closed due to Corona in April 2021 and the GST Registration was cancelled in November 2021

3. During assessment now, the Dept is demanding Rs. 19K as correct tax and 25% penalty (about 5K)

My querry is: 

1. While the section 77 (2) and 19 (2) explicitly mention about not charging interest under this circumstance, there is no specific mention about not charging penalty. Section 122 lists 21 situations under which penalty is applied which doesn't cover this situation. Depositing under wrong head which does not amount to loss of revenue to Govt. need not attract penalty.  
Please help provide specific reference for not charging Penalty. Anyway, upon depositing right tax, IGST will get refunded. Don't want to pay penalty for no wrong. 

2. Is there any specific section, clause or rule to get the refund directly to the Bank account instead of electronic cash ledger as the GST registration of the entity is cancelled. There is  a Kerala High Court judgement of 2018 directing the Dept to refund directly to the Bank Account

AI Summary

Clerical IGST payment error: no interest or penalty, refund allowed in cash under Sections 77(2), 19(2), 54(1) A taxpayer mistakenly paid Rs. 19,000 as IGST instead of CGST/SGST in FY 2018-19. After business closure and GST cancellation in 2021, the department, during assessment, demanded correct tax plus 25% penalty. The querist cites sections 77(2) and 19(2) to argue no interest, and notes section 122 does not cover this error or any revenue loss, seeking authority against penalty and for cash refund despite cancellation. Respondents opine that, being a clerical error with no mens rea or revenue loss, neither interest nor penalty is sustainable, and officers should drop the matter. Citing Kerala High Court precedent and a CBIC circular, they add that an unregistered person may claim refund under section 54(1), which should be paid directly to the bank, not via electronic cash ledger.