Wrong Branch GSTN on Invoice: Delhi HC overturns ₹5.65 Crore GST ITC Rejection [Read Order]

In a recent ruling, the Delhi High Court quashed a Rs. 5.65 crore GST ITC demand ruling that mere mention of the wrong branch GSTN does not justify denying Input Tax Credit (ITC) when the transaction is genuine and no fraudulent claim has been made.

The petitioner, B Braun Medical India Pvt Ltd, a company engaged in the sale of pharmaceutical products and medical devices, challenged an order issued by the Joint Commissioner of Central Goods and Services Tax (CGST).

The dispute arose when the department rejected ITC on the grounds that the invoices issued by the supplier, M/s. Ahlcon Parenterals (India) Limited, reflected the GSTN of the petitioner’s Bombay branch instead of its Delhi GSTN.

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The petitioner’s counsel argued that the discrepancy was a minor clerical error by the supplier and did not affect the validity of the transaction. The invoices correctly mentioned the petitioner’s name and details, and no other entity had claimed ITC for these purchases. They argued that disallowing ITC solely due to an incorrect GSTN would result in an unjust financial burden.

The tax department counsel argued that the petitioner was not entitled to ITC as the GSTN mismatch violated Section 16(2)(aa) of the CGST Act, 2017. The department argued that ITC eligibility is strictly governed by compliance with invoice details, and any discrepancy renders the credit claim invalid.

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The bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the petitioner had not engaged in fraud, misrepresentation, or suppression. The court explained that ITC should not be denied due to a minor clerical error when the transaction itself is genuine. The bench also observed that the department failed to address the petitioner’s argument that no duplicate ITC had been claimed.

The court set aside the impugned order and permitted the petitioner to avail of ITC for the relevant financial years. The writ petition was partly allowed, with the constitutional challenge to Section 16(2)(aa) of the CGST Act being withdrawn after the relief was granted.

To Read the full text of the Order CLICK HERE

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