2025 (6) TMI 247 - HC - GST

Challenge to Exhibit-P1 order of determination as well as Exhibit-P2 order of the Appellate Authority - disallowance of ITC - contention raised by the petitioner is squarely covered by the decision of this Court in Rejimon Padickapparambil Alex v. Union of India and Others 2024 (12) TMI 399 - KERALA HIGH COURT wherein it was observed that the Input Tax Credit available in the electronic credit ledger should be considered as a pool of funds designated for different types of taxes such as CGST IGST and SGST which represents a wallet with different compartments - HELD THAT - On an appreciation of the contentions urged and on a perusal of the impugned orders this Court is of the view that the matter requires reconsideration in the light of the principles laid down in Rejimon Padickapparambil Alex s case. Exhibit-P1 and Exhibit-P2 orders of determination are set aside and the 1st respondent is directed to reconsider the matter in the light of the principles laid down in Rejimon Padickapparambil Alex s case. Petition allowed.

Summary

The Kerala High Court, through Justice Bechu Kurian Thomas, allowed the writ petition challenging the orders of determination (Exhibit-P1) and the appellate authority (Exhibit-P2) that disallowed the petitioner's Input Tax Credit (ITC) under the CGST Act, 2017 for the financial year 2017-18. The petitioner, engaged in trading rice and dairy products, had availed ITC amounting to Rs.1,51,684/-, which was found ineligible, leading to imposition of tax, interest, and penalty. The Court relied on its prior decision in *Rejimon Padickapparambil Alex v. Union of India and Others* [2024 KHC Online 7215], which held that the electronic credit ledger constitutes "a pool of funds designated for different types of taxes, such as CGST, IGST and SGST, which represents a wallet with different compartments," and that "IGST credits can be used for settlement of liabilities arising from SGST and CGST and conversely." The petitioner's use of IGST credit to offset SGST and CGST liabilities was thus not contrary to law.The Court set aside the impugned orders and directed the first respondent to reconsider the matter in light of the *Rejimon Padickapparambil Alex* principles, granting the petitioner a hearing opportunity and requiring a decision within three months. The writ petition was allowed accordingly.