Published on: November 20, 2023 at 11:56 IST
The Patna High Court has dismissed a writ petition filed by Vishwanath Iron Store, a partnership firm under the Bihar State Goods and Services Tax Act.
The firm sought correction of a GST invoice to claim input tax credit. The court emphasized that the understanding between parties cannot override the provisions of taxation laws.
Chief Justice K. Vinod Chandran and Justice Rajiv Roy underscored that in this case, the petitioner, a BGST Act-registered dealer, conducted a sale from Jharkhand to Bihar. However, there was insufficient evidence to prove the movement of goods into Bihar.
The court rejected the notion that a mere statement from the Railways, deeming the invoice under the IGST Act, would entitle the petitioner to claim input tax credit.
The court emphasized that parties cannot unilaterally decide to treat SGST and CGST as IGST without adhering to taxation enactment provisions.
The petitioner, Vishwanath Iron Store, based in Sasaram, Bihar, engaged in scrap material trading, aimed to correct an invoice after winning an e-auction by East Central Railways for materials worth Rs. 17 lakhs. The sale invoice, including CGST and SGST, required correction to IGST due to goods being received in Jharkhand but moving outside the State.
Despite possessing the materials based on the original invoice, the petitioner was denied input tax credit. The petitioner, citing a lack of awareness among partners regarding tax requirements, pointed out the invoicing error, referencing railway notifications acknowledging the mistake in tax collection.
The court highlighted that the goods were delivered in Jharkhand, and the sale was recorded as a local transaction. It emphasized that for a sale to be considered interstate, it should have led to the movement of goods beyond the State, which was not proven in this case.
The court also noted that the invoice in question was from the assessment year 2017-18, and the writ petition was filed in 2021, making it ineligible for claiming input tax credit under the relevant provision.
In conclusion, the court found no grounds to direct the Railways to issue a revised invoice, dismissing the writ petition. The ruling underscores the importance of adhering to taxation laws and the inability of parties to unilaterally alter the tax implications of a transaction.