Section 77 of the CGST Act, 2017 – Refund of tax paid under wrong heading -- The petitioner challenged the Appeal Order dated 23.11.2020. The petitioner submitted that during system configuration at the time of implementation of GST, few business premises located in Telangana State were erroneously tagged to Andhra Pradesh, as such, IGST was paid from the AP GST registration on services rendered from such branches in Telangana instead of CGST + SGST. The petitioner bank has duly paid CGST and SGST suo motu in Telangana in cash and also reported the same. As a result of the same, the petitioner bank has paid tax twice i.e. IGST in Andhra Pradesh and CGST and SGST in Telangana for the same services. The petitioner filed refund applications for the IGST paid but the respondent rejected the same on the ground that the same is time barred as per Section 54. The court observed that the amendment in the rule 89 of CGST Rules clarifies that the refund under Section 77/Section 19 of IGST Act can be claimed before the expiry of two years from the date of payment of tax under the correct head. However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No.35/2021-Central Tax dated 24.09.2021, the refund application under Section 77 /section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification i.e. from 24.09.2021. Further, a reading of the Circular No.162/18/2021-GST clears that if “A” has paid tax under a correct head before issuance of Notification No.35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (two years from date of notification). However, if a particular person pays IGST on the same transaction on 10.11.2022 i.e. after issuance of Notification No.35/2021, the last date for filing would be 09.11.2024. The authority who passed the impugned order could not have considered the Circular issued by the Ministry of Finance in September, 2021, as the same was not issued by the date of the impugned order.

Held that:- The Hon’ble High Court remanded the matter back to the authority to deal with the refund application in the light of the Circular No.162/18/2021-GST dated 25.09.2021, issued more particularly with regard to the applicability of the Circular issued by the Government, and then pass orders in accordance with law.