Mentioning Incorrect GSTIN on Supplier Invoices Not Sufficient
Ground to Deny ITC: Delhi High Court Relief to B Braun Medical India Pvt. Ltd.
Summary of
the Case
In a significant
judgment, the Delhi High Court, in W.P.(C) 114/2025, decided on 12th
March 2025, ruled in favor of M/s B Braun Medical India Pvt. Ltd., a
medical device and pharmaceutical company, in a matter involving disallowance
of Input Tax Credit (ITC) due to a clerical error in supplier invoices.
The Central Goods and Services Tax (CGST) department had denied ITC amounting
to Rs. 5.65 crore citing incorrect GSTIN — of the company’s Bombay
branch instead of the Delhi branch — on the invoices issued by the supplier, M/s
Ahlcon Parenterals (India) Ltd.
The court, comprising Justice
Prathiba M. Singh and Justice Rajneesh Kumar Gupta, held that such a
minor clerical error cannot be the sole basis to deny ITC when no other dispute
on genuineness of transaction or dual claims exists. The impugned order passed
by the department was accordingly set aside, and the petitioner was permitted
to avail the ITC.
Case Title
and Details
- Case Title:
M/s B Braun Medical India Pvt. Ltd. v. Union of India & Ors.
- Case No.:
W.P.(C) 114/2025 & CM APPL. 434/2025
- Date of Judgment:
12th March 2025
- Court:
High Court of Delhi
Facts of
the Case
M/s B Braun Medical India
Pvt. Ltd., engaged in the business of pharmaceutical products and medical
devices, procured a substantial volume of goods from its supplier, M/s
Ahlcon Parenterals (India) Ltd., during the financial years 2017–2021.
Although the invoices
raised were genuine and corresponded with actual supply of goods, the supplier
erroneously mentioned the GSTIN of the Petitioner’s Mumbai branch
instead of its Delhi branch, even though the petitioner was operating in
Delhi and the transactions pertained to that location.
On this basis alone — the
mismatch of the GSTIN — the department, through Order-in-Original No.
04/HK/JC/CGST/DSC/2024-25 dated 28th June 2024, denied the petitioner
ITC worth Rs. 5,65,91,691 and raised a demand accordingly.
Submissions
of the Petitioner
1. Genuineness
of Transaction: The petitioner argued that the supply
transactions were genuine, supported by valid purchase orders, delivery
documents, and payments.
2. Inadvertent
Error: The incorrect GSTIN on the invoice was a clerical
error by the supplier, which should not result in disallowance of rightful
credit.
3. Correct
Party Named: Despite the GSTIN mismatch, the invoices
correctly named the petitioner company — B Braun Medical India Pvt. Ltd. —
and were intended for their Delhi unit.
4. No
Double Claim: It was clarified that no other branch
or entity had claimed ITC on the same invoices.
5. Substantial
Justice: Citing principles of substantial compliance and
purposive interpretation, the petitioner requested the court to allow
rectification and continuation of ITC claim.
6. Challenge
to Constitutionality: Additionally, the petitioner challenged
the constitutional validity of Section 16(2)(aa) of the CGST Act, 2017,
but agreed to withdraw this if relief on ITC was granted.
Submissions
by the Respondents (Union of India & CBIC)
1. Technical
Disallowance Justified: The department took the view that GST
law mandates correct GSTIN on invoices to allow ITC.
2. Rigid
Interpretation of Section 16: It was submitted that strict
compliance with all conditions under Section 16 of CGST Act is
necessary for availment of ITC.
3. No
Provision for Rectification: The authorities argued that rectification
of invoices was not permitted under the current provisions once the
relevant GSTR-1 and GSTR-3B returns had been filed.
However, when queried
by the Court, the department conceded that no other entity had
claimed credit on the same invoices, and the only reason for denial was the
mismatch in GSTIN.
Findings
and Judgment of the Court
The Delhi High Court,
after perusal of records and hearing both sides, made the following key
observations:
Incorrect GSTIN Not a
Valid Ground for Denial
The court emphasized that
incorrect mentioning of GSTIN on supplier invoices, where the correct
name and address of the buyer are mentioned, cannot alone lead to ITC
denial, especially when the tax has been paid to the government and no
dual claim has occurred.
“Substantial loss would
be caused to the Petitioner if the credit is not granted for such a small error
on behalf of the supplier.” – Justice Prathiba M. Singh
Department’s Admission
Was Crucial
The department’s
admission that no other entity had claimed the credit played a pivotal
role. It showed there was no revenue loss and the denial was purely procedural.
Principle of Substantial
Compliance
The court adopted a pragmatic
and equitable approach, preferring substance over form, and ruled that the denial
of legitimate credit due to a minor technical error would defeat the
very objective of GST — a consumption-based tax enabling seamless input credit.
Final
Judgment
The High Court partially
allowed the writ petition with the following reliefs:
1. Impugned
Order Quashed: The Order-in-Original dated 28.06.2024
was set aside.
2. ITC
Restored: Petitioner was permitted to avail the ITC for
the supplies made by M/s Ahlcon Parenterals during:
|
Financial
Year
|
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
|
₹81,504
|
₹81,504
|
₹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
|
3. No
Ruling on Constitutionality: As per petitioner’s submission, the
challenge to Section 16(2)(aa) was not pressed after relief on ITC was
granted.
Conclusion
This ruling by the Delhi
High Court is a landmark precedent for businesses facing clerical
issues in supplier invoices, especially regarding GSTIN mismatch. It
reaffirms the judicial approach of substance over form and highlights
the importance of justice-oriented interpretation of GST laws.
By setting aside the
impugned order and restoring ITC, the court has safeguarded the core objective
of GST — seamless credit mechanism — and protected the interests of honest
taxpayers from being penalized for minor errors committed by
suppliers.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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