Introduction

This judgment reiterates that mere availment of Input Tax Credit (ITC) under the wrong tax head due to a bona fide human error does not automatically amount to wrongful availment warranting proceedings under Section 73 of the CGST Act. Relying upon Rejimon Padickapparambil Alex v. Union of India and CBIC Circular No. 192/04/2023-GST, the Kerala High Court held that the electronic credit ledger functions as a unified pool of funds, and where there is no actual short payment of tax or revenue loss arising from wrongful availment, proceedings under Section 73 are not sustainable merely because the credit was reflected under an incorrect head.

Background of the Case

The petitioner, MJBR Marketing and Financial Services Pvt. Ltd., is engaged in providing marketing and financial services and is registered under the GST laws.