Invoice Irregularities vs. ITC Entitlement – Delhi High Court’s Clarification
M/S B Braun Medical India Pvt Ltd
Vs
Union of India
Appeal: W.P.(C) 114 OF 2025
Date of Judgement: 12 March, 2025
BACKGROUND
The Delhi High Court, in M/S B Braun Medical India Pvt Ltd v. Union of India & Ors. (March 12, 2025), dealt with the rejection of Input Tax Credit (ITC) on account of a clerical error in supplier invoices, where the GSTN of the petitioner’s Bombay office was mentioned instead of its Delhi office.
The petitioner argued that the transactions were genuine and well-documented, with only a GSTN mismatch, and that denying ITC for such a mistake would cause disproportionate hardship. The respondents maintained that Section 16 of the CGST Act, 2017 requires accurate invoice details and any discrepancy amounts to non-compliance.
The bench, comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, held that since the petitioner’s name was correctly reflected and the transactions were genuine, denying ITC due to a supplier’s clerical mistake was unfair and disproportionate. The court set aside the demand order, emphasizing that procedural lapses should not override substantive rights. This ruling provides relief to businesses, sets an important precedent for ITC-related disputes, and reinforces the principle that genuine transactions cannot be disqualified due to minor technical errors.
ISSUE
Whether a typographical error in the GST invoice of the supplier can justify denial of ITC to the recipient?
IMPORTANT PARAGRAPHS
Para 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 orders. 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.
Para 5. On the last hearing i.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.
Para 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, i.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 be W.P.(C) 114/2025 Page 2 of 3 caused to the Petitioner if the credit is not granted for such a small error on behalf of the supplier.
Para 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.
