Rajesh Vyas vs. Hindustan Petroleum Corporation Limited

Held

The Court held that the primary relief sought by the petitioner, which was to obtain GST invoices from HPCL, had been substantially granted when HPCL filed an affidavit with the details of invoices and the amount of GST deducted. The Court noted that HPCL had treated the outward supplies to the petitioner as Business to Customer (B2C) supplies to an "Unregistered Dealer" because the petitioner's GST number was not recorded on the invoices. This prevented the petitioner from claiming input tax credit as the transactions were not considered valid Business to Business (B2B) supplies. Consequently, the Court remitted the matter back to the Respondent No.2-Assistant Commissioner, Sales Tax, Bhopal, to reconsider the proceedings under Section 74 of the GST Act for the tax period of July 2017 to March 2018 (FY 2017-18). The petitioner was permitted to submit a detailed reply along with the invoices supplied by HPCL to the show cause notice. The Court allowed the Writ Petition with these directions.

Facts

The petitioner, Rajesh Vyas, claiming to be the proprietor of M/s Roopa Gas, a former LPG distributor for Hindustan Petroleum Corporation Limited (HPCL), filed a writ petition. HPCL had stopped supplies to him after his father's death, as they did not recognize him as the proprietor due to disputes among legal heirs. The petitioner obtained GST registration in July 2017. His grievance was that HPCL issued invoices to him as an "Unregistered Dealer" instead of mentioning his GST number, preventing him from filing returns and claiming input tax credit. He sought directions for HPCL to issue duplicate GST invoices for the period July 2017 onwards. Subsequently, the GST Authority initiated proceedings under Sections 73 and 74 of the GST Act, demanding Rs. 3,79,01,658/-. The petitioner amended his petition to challenge this demand. HPCL eventually provided the GST invoices.

Key Issues

1. Whether the petitioner, as the proprietor of M/s Roopa Gas, is entitled to receive GST invoices from HPCL that include his GSTIN, enabling him to claim input tax credit, particularly when HPCL has been issuing invoices treating him as an "Unregistered Dealer"? 2. Whether the proceedings initiated by the GST Authority under Sections 73 and 74 of the GST Act, 2017, demanding a significant sum, are sustainable in light of HPCL's failure to provide proper GST invoices, thereby hindering the petitioner's ability to claim input tax credit? Petitioner's Contentions: The petitioner argued that HPCL's failure to issue invoices with his GSTIN prevented him from filing GST returns and claiming input tax credit, leading to the GST Authority's demand under Sections 73 and 74. He sought directions for HPCL to issue correct invoices. He also sought to halt proceedings by the GST Authority until proper invoices were provided. Revenue/State's Contentions: The GST Authority contended that HPCL treated supplies to the petitioner as Business to Customer (B2C) supplies to an "Unregistered Dealer," and therefore, the petitioner's GST number could not be recorded. They stated that a registered person can claim input tax credit only with a valid tax invoice containing the recipient's GSTIN, as per Section 16(2)(a) of the CGST Act and Rule 46 of the CGST Rules. Since the petitioner's GST number was not on the invoices, the transactions were not valid Business to Business (B2B) supplies for input tax credit purposes.