Error By Supplier In Mentioning GSTN Of Trader Can't Form Basis To Reject ITC On Purchases: Delhi High Court
Kapil Dhyani
17 March 2025 7:35 AM
The Delhi High Court recently came to the rescue of a Company engaged in the sale of various pharmaceutical products and medical devices, holding that it could not be denied Input Tax Credit on purchases merely because its supplier had mentioned a wrong GST number on the invoices.
In the facts of the case, a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed,
“The only basis for rejecting the ITC is the mention of the Bombay office GSTN instead of the Delhi office GSTN. Substantial loss would be caused to the Petitioner if the credit is not granted for such a small error on behalf of the supplier.”
The petitioner had purchased a large quantity of products from M/s. Ahlcon Parenterals (India) Limited on the basis of various purchase orders. However, the invoices for the said products inadvertently reflected the Bombay address and Bombay GSTN of the Petitioner, instead of the Delhi GSTN number.
This led to the impugned demand to the tune of Rs.5,65,91,691/- against the Petitioner on the ground that it had wrongly availed of excess ITC.
The petitioner argued that it is clearly a Delhi-based company and that the incorrect reflection of its Bombay GSTN on the invoices was merely an error by the supplier.
At the outset, the High Court noted that the Petitioner's name was correctly mentioned in the invoices, but the wrong GST number was mentioned. However, no stand on this issue was taken by the Department in its counter affidavit.
The Court then proceeded to put a direct query to the Standing Counsel for the Department, who conceded that no other entity had claimed ITC on these purchases/ invoices.
As such, the Court held that an error by the supplier in correctly mentioning the purchaser's GSTN can't be detrimental to the latter.
It thus set aside the impugned demand and permitted the Petitioner to avail ITC in respect of prescribed goods.
Appearance: Mr. Tarun Gulati, Sr. Advocate with Ms. Ashwini Chandrasekaran, Mr. Mahir Chablani and Mr. Devansh, Advocates for Petitioner; Mr. Shubham Tyagi, SSC for CBIC for Respondent
Case title: M/S B Braun Medical India Pvt Ltd v. Union Of India & Ors.
Case no.: W.P.(C) 114/2025