M/S Bathla Teletech PVT LTD. vs. The State Of Bihar

Held

The Court held that physical receipt of goods by the dealer is not an absolute requirement for claiming ITC under Section 16(2)(b) of the CGST Act. The Court reasoned that if the registered person can demonstrate an agreement or Memorandum of Understanding (MOU) among the supplier, dealer, and end consumer, and provide intimation to the end consumer regarding the transaction, the registered person can be deemed to have 'received' the goods. The Court found that the cited decisions by the respondents were not applicable as they did not address the interpretation of Section 16(2)(b) concerning the mode of receipt of goods. The Court emphasized that the crucial aspect is whether the goods were used or intended to be used in the course or furtherance of business. The impugned orders were set aside, and the matter was remanded to the Deputy Commissioner of State Tax for a fresh examination of the existence of an MOU and documentary evidence of delivery to the end consumer. If these materials favored the petitioner, their grievance was to be redressed accordingly.

Facts

The petitioners, M/s Sane Retails Private Limited, M/s Bathla Teletech Pvt. Ltd., and M/s Utkrisht Trade Solutions Pvt. Ltd., filed writ petitions challenging orders passed by GST authorities. The core issue revolves around the denial of Input Tax Credit (ITC) due to the petitioners not physically receiving the goods, but rather instructing suppliers to deliver them directly to end consumers. The petitioners contended that they had provided sufficient material to demonstrate the transactions and the delivery to end consumers, and that the tax collected by the supplier had been deposited. The authorities, however, had disallowed ITC, leading to the present petitions before the High Court.

Key Issues

1. Whether the petitioners are entitled to claim Input Tax Credit (ITC) under Section 16(2)(b) of the CGST Act when goods are delivered by the supplier directly to the end consumer upon the instruction of the registered person, without physical receipt by the registered person. Petitioner's Arguments: The petitioners argued that physical receipt of goods by the registered person is not mandatory for claiming ITC, provided there is an agreement among the supplier, dealer, and end consumer, and the end consumer is informed about the transaction. They asserted that they had provided all necessary documentation to the authorities to establish the receipt of goods and the subsequent delivery to end consumers. They also highlighted that the supplier had deposited the tax collected from them, which was not disputed by the revenue. Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue or state respondents. However, their actions in passing orders disallowing ITC indicate a contention that physical receipt of goods by the registered person is a prerequisite for claiming ITC under Section 16(2)(b) of the CGST Act.