B Braun Medical India Pvt Ltd Vs Union of India & Ors
Date: March 11, 2025
Subject Matter
Minor technical errors like wrong address & GSTN on invoices should not unjustly deny a company its entitled ITC
Summary
The Delhi High Court ruled in favor of B Braun Medical India Pvt. Ltd., which sought Input Tax Credit (ITC) after tax authorities denied the claim due to an incorrect GST number on invoices issued by Ahlcon Parenterals (India) Ltd. While the invoices incorrectly listed B Braun's Bombay GST number instead of the correct Delhi GST number, the court found that the name of the petitioner was accurately mentioned and no other entity claimed the ITC for those purchases. The court noted that the error was minor and made by the supplier, not the petitioner. Given the significant financial implications, the court allowed for the correction of the invoices and reinstated B Braun's claim for ITC while the petitioner agreed to withdraw its constitutional challenge regarding the validity of Section 16(2)(aa). This judgment underscores that minor technical errors should not unjustly deny a company its entitled tax credits, emphasizing the overall correctness of transaction details rather than technical discrepancies.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed under Article 226 and 227 of the Constitution of India challenging,
(i) impugned order dated 28th June, 2024, being Order-in-Original no. 04/HK/JC/CGST/DSC/2024-25, issued by the Id. Joint Commissioner of Central Goods and Services Tax, Delhi, South Commissionerate, and
(ii) the vires of Section 16(2)(aa) of the Central Goods and Services Tax Act, 2017.
3. Vide the impugned order a demand to the tune of Rs.5,65,91,691/- has been raised against the Petitioner on the ground that the Petitioner has wrongly availed of excess Input Tax Credit (hereinafter ITC).
4. Petitioner is a company, which is engaged in the sale of various pharmaceutical products and medical devices. The case of the Petitioner is that it had purchased a large quantum of products from M/s. Ahlcon Parenterals (India) Limited (hereinafter ‘Ahlcon”) on the basis of various purchase It is stated that the invoices for the said products were raised by Ahlcon on the Petitioner, however, the said invoices inadvertently reflected the Bombay address and Bombay GSTN of the Petitioner, instead of the Delhi GSTN number. This has led to the impugned demand.
5. On the last hearing e., 8th Janurary, 2025, Mr. Tarun Gulati, Id. Senior Counsel appearing on behalf of the Petitioner, relied upon the purchase orders and invoices, to submit that, the Petitioner is clearly a Delhi based company and incorrect reflection of Petitioner’s Bombay GSTN on the invoices was merely an error by the supplier.
6. However, the Department had taken a stand that the Petitioner is not entitled to the ITC and has accordingly, passed the impugned order.
7. Today, the counter affidavit has been placed on record and the Court has pursued it.
8. As noted in the previous order, the fact of the matter is that the Petitioner’s name is correctly mentioned in the invoices, however, the wrong GST number, e., of the Bombay office has been mentioned. On this issue, there is no stand taken by the Department in the counter affidavit. On a direct query being put to the ld. Standing Counsel for the Respondent/Department, he fairly admits that no other entity has also claimed at the ITC on these purchases. The only basis for rejecting the ITC is the mention of the Bombay office GSTN instead of the Delhi office GSTN. Substantial loss would becaused to the Petitioner if the credit is not granted for such a small error on behalf of the supplier.
9. Mr. Gulati, lastly submits that if the correction in the invoices is permitted and the Petitioner is provided the Input Tax Credit (ITC), the challenge to the constitutional validity shall not be pressed by the Petitioner.
10. In view of the above submissions and circumstances, the prayer of the Petitioner is allowed to the following extent:
(i) The impugned Order in Original dated 28th June, 2024 rejecting the ITC is set aside.
(ii) The Petitioner is permitted to avail of the Input Tax Credit in respect of the following supplies for the following period:
| Period | Amount of excess availment of Input Tax Credit (in Rs.) | |||
| IGST | CGST | SGST | Total | |
| 2017-18 | 1,49,69,083 | 0 | 0 | 1,49,69,083 |
| 2018-19 | 0 | 0 | 0 | 0 |
| 2019-20 | 2,32,95,508 | 81504 | 81504 | 2,34,58,516 |
| 2020-21 | 1,81,64,092 | 0 | 0 | 1,81,64,092 |
| TOTAL | 5,64,28,683 | 81,504 | 81,504 | 5,65,91,691 |
11. None of the other reliefs are Accordingly, the petition is partly allowed and is disposed of in above terms. All pending applications, if any, is also disposed of.