Judicial Corner:Amount recovered from assessee’s credit ledger to be recredited as supplier later paid IGST dues – Calcutta High Court (04.09.2025)

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Amount recovered from assessee’s credit ledger to be recredited as supplier later paid IGST dues – Calcutta High Court {Rabin Sarkar V/s Deputy Commissioner of Revenue, State Tax (2025) 33 Centax 310 (Cal.)}

Facts

  • The assessee claimed refund of Rs. 1,67,974 recovered from his cash ledger.
  • Recovery was made on the ground that the assessee’s supplier had failed to properly discharge IGST liability / upload details in GSTR-1.
  • The assessee argued that the recovery was illegal since the supplier had later admitted the lapse and paid the IGST.
  • The assessee challenged the appellate order under Section 107 of CGST Act.

Issue:

  • Whether recovery from assessee was valid when supplier had later paid IGST.

Held (Calcutta High Court)

  • The supplier admitted the mistake of not paying IGST earlier but subsequently discharged the tax liability.
  • The supplier cannot escape statutory liability it must take steps to correct the error.
  • The orders of authorities require reconsideration.
  • The amount already recovered (Rs. 1,67,974) must be re-credited to the assessee’s credit ledger.
  • Proceedings were covered under Section 73 r/w Section 107 of the CGST Act, 2017.