Facts of the Case

M/s. Venkateswara Traders, a dealer registered under the CGST Act, 2017 and the SGST Act, 2017, had not availed input tax credit available to it under the IGST Act, 2017. To set right its position, the petitioner reversed the balance excess ITC availed under the SGST and CGST Acts by adjusting the ITC available to it under the IGST Act. The respondent authorities declined to accept this cross-head adjustment and sought recovery of the excess ITC. Aggrieved by the order dated 25.02.2025 rejecting the adjustment, the petitioner approached the High Court of Andhra Pradesh under Article 226.

Issues Involved

  1. Whether the Assessing Authority erred in refusing to give effect to the petitioner's adjustment of excess CGST/SGST credit against available IGST credit.
  2. Whether the amendment to Section 49 of the CGST Act, effective 01.10.2022, permitting payment by adjusting credit in the electronic credit ledger, was properly considered.
  3. Whether the writ petition was maintainable without exhausting the alternate statutory appellate remedy.

Petitioner's Arguments

  • The Assessing Authority failed to give effect to the petitioner's bona fide reversal/adjustment of excess ITC availed under SGST/CGST through the IGST credit available to it.
  • The amendment to Section 49 of the CGST Act with effect from 01.10.2022, permitting payment through adjustment of the electronic credit ledger, was not considered.
  • Reliance was placed on the Kerala High Court's judgment in Rejimon Padickapparambil Alex v. Union of India (W.A.No.54 of 2024, dated 28.11.2024).

Respondent's Arguments

  • The dispute concerns the correctness of the adjustment between different heads of tax and credit, which is a matter for the appellate authority to examine on facts and law, not for a writ court.

Court Order / Findings

  • The Court held that the questions raised — whether the cross-head ITC adjustment was permissible and whether the amended Section 49 was correctly applied — squarely fall within the domain of the statutory appellate remedy.
  • None of the recognised exceptions permitting a writ despite an alternate remedy — breach of natural justice, or fundamental/constitutional rights — were shown to exist.
  • The writ petition was dismissed, leaving the petitioner free to avail of the appellate remedy, with the time consumed in the writ petition (21.04.2025 till the order) excluded for computing limitation.

Important Clarification

  • A challenge to cross-head ITC adjustments, including reliance on amended Section 49, is ordinarily to be agitated before the statutory appellate authority; the writ court will not substitute itself for the appellate forum absent a natural-justice or constitutional infirmity, though it may protect the taxpayer by excluding the litigation period from limitation.

Sections Involved

  • Section 49 of the CGST Act, 2017 (as amended w.e.f. 01.10.2022) — governs payment of tax, interest, penalty and other amounts, including through adjustment of the electronic credit ledger.
  • Article 226 of the Constitution of India — the writ jurisdiction invoked, and the limits on its exercise where an efficacious statutory remedy exists.

Decision – In Favour of

Disposed of with directions, without deciding the ITC-adjustment merits — the writ was dismissed with liberty to appeal and exclusion of time for limitation.

Case Details

High Court of Andhra Pradesh at Amaravati; W.P.No. 10494 of 2025; Coram: Justice R. Raghunandan Rao and Justice Sumathi Jagadam; Order dated 18.06.2025.

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