MANISSERY JAYACHANDRAN v. UNION OF INDIA & ORS.

Introduction

This judgment reinforces the legal principle laid down by the Kerala High Court in Rejimon Padickapparambil Alex v. Union of India, holding that the Electronic Credit Ledger under the GST regime functions as a unified wallet comprising separate compartments for IGST, CGST, and SGST. The Court held that mere availment or utilization of Input Tax Credit (ITC) under a different tax head, particularly during the transitional phase from VAT to GST, does not amount to wrongful availment of ITC. Since both the Assessing Officer and the Appellate Authority proceeded on an incorrect legal premise, the assessment and appellate orders were set aside and the matter was remanded for fresh consideration.

Background of the Case

The petitioner, Manissery Jayachandran, was assessed for the financial year 2017-18, a period immediately following the transition from the VAT regime to GST.