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2025 (2) TMI 1005 - HC - GSTAdjustment of the amount paid based on the demand raised by the respondents in Form GST DRC-07 - HELD THAT - Having considered the scheme of rule 142 of the said rules which provides that voluntary payments or payments made pursuant to intimation made in FORM GST DRC-01 by the proper officer before a demand is raised shall be made in FORM GST DRC-03 however once a demand is raised or an order is passed and a demand is raised for recovery in GST DRC-07 the payment thereof could only be made by crediting the demanded amount in the electronic liability registered in FORM GST PMT-01 against the debit entry created for such demand. It is noted that sub-rule (2B) of rule 142 has recently been inserted by notification no.12/24 dated 10th July 2024 which takes care of payments made in FORM GST DRC -03 against a recovery demand as well. Admittedly in this case the petitioners had paid the demand in Form GST DRC-03 instead of crediting the said amount in electronic liability register in Form GST PMT -01 against the debit entry created for the said demand. It appears that rule (2B) taking note of such anomalous situations has provided for an opportunity to such person to apply in Form GST DRC-03A electronically on the common portal for availing the benefit of the amount already paid in Form GST DRC-03 for the same to be credited in the electronic liability register in Form GST PMT 01 against the debit entry already created for the said demand. Since it is an admitted position that the petitioners had made payment in Form GST DRC-03 the petitioners are permitted to make an appropriate application in Form GST DRC-03A electronically. If the petitioners make an application under Section 54 of the said Act such application shall duly be processed and the amount as aforesaid already recovered shall be refunded back to the electronic cash/credit ledger of the petitioners within a period of two weeks from the date of making such application. The writ petition is disposed of.
ISSUES PRESENTED and CONSIDERED:
1. Whether the petitioners are entitled to an adjustment of the amount paid based on the demand raised by the respondents in Form GST DRC-07. ISSUE-WISE DETAILED ANALYSIS: Relevant legal framework and precedents: The case revolves around the interpretation of rule 142 of the CGST/WBGST rules, 2017, specifically sub-rules (2) and (2B), which govern the payment of tax demands and the procedure for rectifying anomalies in payment. Court's interpretation and reasoning: The Court considered the provisions of rule 142 and the recent insertion of sub-rule (2B) to address situations where payments are made incorrectly against demands. The Court emphasized the importance of following the prescribed forms for payment to ensure proper crediting of the amount in the electronic liability register. Key evidence and findings: The petitioners had made a payment in Form GST DRC-03 instead of crediting the amount in the electronic liability register as required by the rules. Application of law to facts: The Court applied the provisions of rule 142 and allowed the petitioners to rectify the anomaly by filing an application in Form GST DRC-03A to have the amount already paid credited in the electronic liability register. Treatment of competing arguments: The State respondents argued that the petitioners were at fault for the situation created due to incorrect payment method. They relied on the provisions of rule 142 to support their position. Conclusions: The Court permitted the petitioners to file an application in Form GST DRC-03A to rectify the payment anomaly. It directed the respondents to credit the amount already paid in the electronic liability register against the demand raised. Additionally, the Court ordered the refund of the recovered amount to the petitioners' electronic cash/credit ledger upon application under Section 54 of the said Act. SIGNIFICANT HOLDINGS: The core principle established in this judgment is the importance of adhering to the prescribed forms for payment under the GST laws to ensure proper crediting of amounts in the electronic liability register. The final determination on the issue was to allow the petitioners to rectify the payment anomaly by filing an application in Form GST DRC-03A and directing the respondents to credit the amount paid against the demand raised and refund the recovered amount upon application under Section 54 of the said Act.
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