B. Braun Medical India Pvt. Ltd. Vs Union of India & Ors (Delhi High Court)
The Delhi High Court addressed a petition filed by B. Braun Medical India Pvt. Ltd. against an order that denied their Input Tax Credit (ITC) claim. The core issue stemmed from a supplier, M/s. Ahlcon Parenterals (India) Limited, incorrectly stating B. Braun’s Bombay GSTN on invoices, instead of their Delhi GSTN. This error resulted in a demand of approximately Rs. 5.66 crore being raised against B. Braun. The com-pany argued that the incorrect GSTN was a simple supplier error, and they provided purchase orders and invoices to substantiate their claim of being a Delhi-based entity. The court noted that the Department’s counter-affidavit did not contest the fact that the company’s name was correctly listed on the invoices. Further, the Department admitted that no other entity had claimed ITC on these specific purchases, highlighting the sole basis for rejection being the GSTN error. The court acknowledged the potential for substantial financial loss to B. Braun if the ITC was denied due to this minor error.
The court, after examining the submissions and the counter-affidavit, decided to allow B. Braun’s petition in part. The impugned order, which had rejected the ITC claim, was set aside. The court permitted B. Braun to avail the ITC for the specified periods, which included financial years 2017-18, 2019-20, and 2020-21, totaling Rs. 5,65,91,691. This decision was made on the understanding that B. Braun would not pursue its challenge to the constitutional validity of Section 16(2)(aa) of the Central Goods and Ser-vices Tax Act, 2017, if the ITC was granted. The court emphasized the factual supply of goods and the absence of any other ITC claim on the same transactions. The ruling effectively prioritized the substance of the transaction over a procedural error, ensuring that the company was not penalized for a mistake made by its supplier. The judgment underscores the importance of considering the practical aspects of business transactions and the need for a balanced approach in enforcing tax regulations.
