M/S. Vishwanath Iron Store vs. The Union Of INDIA TO The Secretary

Held

The Court held that the petitioner was not entitled to a writ of mandamus directing the Railways to issue a revised invoice. The Court noted that the goods were delivered in Jharkhand, and the sale was treated as a local sale as per the delivery/sale release order. The petitioner received the goods in Jharkhand, and there was no evidence presented to prove that the goods had actually moved outside the State of Jharkhand. The Court found that the transaction between the Railways and the petitioner could not regulate the tax liability, and the tax levied and collected as CGST and SGST would have been credited to the respective accounts. Furthermore, the Court observed that the invoice was issued in the assessment year 2017-18, and the writ petition was filed in 2021. Under Section 16(4) of the BGST Act, input tax credit for an invoice dated 23.10.2017 had to be claimed before 28.11.2017 or the furnishing of the annual return for the financial year 2017-18, whichever was earlier. Therefore, availing input tax credit at the time of filing the writ petition was impossible. The Court found no reason to direct the Railways to issue a revised invoice.

Facts

M/s. Vishwanath Iron Store, a partnership firm registered under the Bihar State Goods and Services Tax Act, 2017, participated in an e-auction by East Central Railways for scrap materials. The petitioner was successful and received a sale invoice for approximately Rs. 17 lakhs, which levied CGST and SGST at 9% each. The petitioner paid these amounts and took possession of the materials. The petitioner later realized that since the goods were taken possession of in Jharkhand and intended for movement outside the state, IGST should have been levied instead of CGST and SGST. This error resulted in the petitioner being denied input tax credit. The petitioner sought a writ of mandamus from the High Court directing the Railways to issue a fresh invoice to rectify this mistake and enable input tax credit claim.

Key Issues

1. Whether the petitioner is entitled to a writ of mandamus directing the Railways to issue a fresh invoice, considering the goods were delivered in Jharkhand and the sale was treated as local, despite the petitioner's claim that it should have been an inter-State sale attracting IGST? (Section 10 of IGST Act, 2017, and Section 7 of CGST Act, 2017) Petitioner's arguments: The petitioner contended that the invoice was issued by mistake, levying CGST and SGST instead of IGST, as the goods were taken possession of in Jharkhand and intended for movement outside the State. They relied on railway notifications suggesting that such invoices were issued erroneously and should be deemed as IGST. They sought a fresh invoice to claim input tax credit. Revenue/State's arguments: The respondents argued that the sale was effected from Jharkhand, and there was no proof of goods moving to Bihar. They asserted that the transaction between the parties could not regulate tax liability, and the tax collected as CGST and SGST was credited to the respective accounts. They also pointed out that the invoice was from the 2017-18 financial year, and the writ petition was filed in 2021, making the claim for input tax credit time-barred under Section 16(4) of the BGST Act.