2023 (1) TMI 788 - HC - GST

Detention of goods alongwith the vehicle - failure to have mentioned the unique Identiy Number/GSTN number of the recipient - HELD THAT - It is true 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 a bill to ship to consignment. The petitioner has made a full disclosure in regard to the purchaser, including the GST particulars, address and PAN number. The prescription under Rule 46 is thus fully satisfied. In addition, the particulars of the consignee are also set out and in my considered and categoric view, this limb of the transaction is not bound by the vigour of the procedure set out 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. However, what has transpired is that the respondents have simply lost sight of the bill to ship to mode of doing business. The impugned order is set aside and the detained consignment along with cargo ordered to be released forthwith - Petition allowed.

Summary

Issues:
1. Detention of goods under the Goods and Services Tax Act, 2017 due to missing GST details on the invoice.
2. Interpretation of Rule 46 of the Central Goods and Services Tax Rules, 2017 regarding tax invoice requirements.
3. Validity of a "Bill to - Ship to" transaction in the context of GST compliance.

Analysis:
1. The petitioner, a company engaged in manufacturing UPVC windows, faced detention of goods under an order dated 19.10.2022 due to missing GST details on the invoice. The consignment was intended for a third party destination, but the detention was based on the consignee being an unregistered person according to the officer.

2. The Government Advocate pointed out Rule 46 of the CGST Rules, emphasizing the mandatory requirement of mentioning the recipient's GST details on the tax invoice. Failure to include this information was deemed fatal to the transaction by the respondent.

3. However, the Honorable Judge disagreed with this interpretation, highlighting that the statutory declarations, including the tax invoice and e-way bill, clearly outlined the sequence of events in the "Bill to - Ship to" transaction. The petitioner had disclosed all necessary details of the purchaser, satisfying Rule 46 requirements. The judge noted that the transaction mode was not intended to evade tax but rather a legitimate business practice.

4. The judge referenced an official response from the Goods and Services Tax Department's website, clarifying the handling of "Bill to - Ship to" invoices in the e-way bill system. This information supported the validity of such transactions and guided the judge's decision to set aside the impugned order and release the detained consignment immediately.

5. Ultimately, the judgment allowed the Writ Petition, with no costs imposed, and closed all connected Miscellaneous Petitions. The detailed analysis provided a comprehensive understanding of the legal issues involved and the reasoning behind the decision to release the detained goods in the context of GST compliance and business practices.