HC directed department to refund amount recovered from recipient since wrong GSTR-1 was filed by supplier

 

Facts:

 

The assessee participated in an e-auction and successfully purchased scrap. However, the supplier failed to report the purchase entries correctly in their GSTR-1 by not reporting the auction sales invoice. As a result, the Input Tax Credit (ITC) was not reflected in assessee’s GSTR-2A. The assessee made several attempts to rectify the situation by contacting the supplier, who eventually acknowledged the auction sale and confirmed receiving full payment, including GST, from the assessee.

Upon receiving a demand notice from the department, the assessee agreed to repay the necessary GST amount under protest to prevent the cancellation of their GSTIN due to non-payment of GST charges. Subsequently, the assessee filed a writ petition seeking a refund of the amount paid under protest.

High Court Held:

 

The Honorable High Court observed that the supplier had admitted that the GST amount had been mistakenly deposited and reflected in the wrong GSTIN, instead of the assessee’s GSTIN. The Court further noted that it is a settled law that no one can’t be made to suffer for fault of another. Consequently, the Court concluded that the assessee was entitled to a refund from the tax department. Accordingly, the Court directed the department to return the amount to the assessee.