The Hon’ble High Court of Madras vide its order dated 04.11.2022 in the matter of M/s DCM Shriram Limited Represented by its Authorised Signatory Mr. Sindha Mohammed Fayaz Vs. The State Tax Officer – 1 (Int) Adjudication Cell, Tamil Nadu in W.P.No.29281 of 2022 And WMP Nos.28573, 28574 and 28576 of 2022,  set aside the order detaining the goods of the assessee for not mentioning the Unique Identity Number/GSTN number of the recipient on the invoice.  It was found by the assessee/petitioner has made a full disclosure in regard to the purchaser, including the GST particulars, address and PAN number and thus, satisfies the requirements of Rule 46.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the impugned order dated 26.10.2022, whereby the goods of the petitioner were detained.

Facts of the Case: –

• The Petitioner Company is engaged in the manufacture of UPVS windows. The petitioner had entered into a transaction for supply of goods to an individual, a registered dealer under the provisions of the Goods and Services Tax Act, 2017 (in short ‘Act'), whose place of business is situated at 37/1, Aga Abbas Ali Road, Ulsoor, Bangalore – 560 001 (Consignee).
• The Consignee had, in turn, entered into a transaction for sale/delivery of goods to M/s. Signature Groups at 36/3, Old No.578, Vasavi Avenue, Bangalore – 560 041. The transaction was arranged as a Bill to – Ship to transaction, in terms of which, while the invoice reflects the consignee as the taxable entity in the transaction for administrative and logistical purposes, the delivery of the consignment would be to a third-party destination, the location of Signature Group.
• The said goods were intercepted and detained by an order of detention dated 10.2022. That Form GST-MOV-01 (order of detention) was issued, stating the reason for detention as ‘Goods (UPVC window) moved from Kanchipuram to Karnataka. Ship to Address is unregistered person. Hence GDN Issued.'
• In response to the said notice under Section 129(3), the petitioner explained that the transaction was arranged as bill to – ship to transaction, which require disclosure of only the registration details of the consignee and statutorily it is necessary to provide the registration details of the ultimate consumer in the e-way bill.
• Further, incidentally, the Signature Groups is also registered, though, it is admitted that the GST number is not mentioned in the e-way bill.  The reply dated 10.2022, which was handed over to the respondent officer on 26.10.2022, was rejected for the same reason for which the goods were detained.  The Officer cryptically stated that ‘Ship to address is unregistered person and GST Number is not mentioned in tax invoice.’

Referring to Rule 46(Tax Invoice), it was submitted on the behalf of the respondent that there is a failure to mention the unique identity number of the recipient, and the same would be fatal to the transaction and the detention was proper.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, disagreed with the contentions raised on the behalf of the respondent and found that Rule 46 require the tax invoice to reflect the GSTN/Unique Identity number of the recipient. However, the said rule has not taken into account the concept of bill to – ship to consignment.
• Thereafter, the Hon’ble Court taking into consideration the sequence of events in the present, based on the tax invoice and e-way bill, found that the petitioner has made a full disclosure in regard to purchaser, including the GST particulars, address and PAN number. Thus, the requirements under Rule 46 are fully satisfied.
• The Hon’ble Court was of the considered and categoric view that the details of the consignee are also mentioned, however, this part of the transaction is not bound by the procedure prescribed under the Act and Rules. It would have been an entirely different matter, had the respondents suspected the transaction as being a method to avoid tax.
• The Hon’ble Court thereafter, took reference of the ‘frequently asked questions’ available on the Official website of the Goods and Service Tax Department – ‘How to handle “Bill to” – “Ship to” invoice in e-way bill system?, wherein it was answered that: –

‘In the e-way bill form, there are two portions under ‘TO' section. In the left-hand side – ‘Billing To' GSTIN and trade name is entered and in the right-hand side – ‘Ship to' address of the destination of the movement is entered. The other details are entered as per the invoice.

In case ship to state is different from Bill to State, the tax components are entered as per the billing state party. That is, if the Bill to location is inter-state for the supplier, IGST is entered and if the Bill to Party location is intra-state for the supplier, the SGST and CGST are entered irrespective of movement of goods whether movement happened within state or outside the state.'

The Hon’ble High Court with the above findings, allowed the writ petition by setting aside the impugned order and order for the release of detained consignment along with Cargo.