K.S. Traders Vs The Deputy Commercial Tax Officer (INT) (Madras High Court)
Summary: The Madras High Court, Madurai Bench, in M/s K.S. Traders Vs The Deputy Commercial Tax Officer (INT), Roving Squad, W.P.(MD) No. 23310 of 2025, decided on 26 August 2025, allowed a writ petition challenging a GST penalty of ₹4,42,672 imposed due to a discrepancy between the address mentioned in the e-invoice and the place of dispatch recorded in the corresponding e-way bill. The petitioner, a timber importer, had dispatched a consignment to a customer at Vilathikulam in Thoothukudi District and generated an e-invoice on 23 June 2025 mentioning its registered business premises at Shencottah. The e-way bill generated on 24 June 2025 contained the same invoice particulars but recorded Tuticorin, Tamil Nadu, as the place of dispatch. Treating this variation as a discrepancy, the GST authorities intercepted and seized the consignment and initiated proceedings through Forms GST MOV-01 to MOV-09. The petitioner subsequently paid the tax and penalty amounts to secure release of the goods and challenged the penalty order dated 2 July 2025, seeking refund of ₹4,42,672. The Department argued that payment of the demanded amount had concluded the proceedings under Section 129(5) of the respective GST enactments.
The petitioner relied upon the earlier judgment of the Madras High Court in M/s Jindal Pipes Limited Vs Deputy State Tax Officer (Int.), Roving Squad-I, Madurai, W.P.(MD) No. 17211 of 2024, decided on 25 July 2024, wherein the Court had held that minor discrepancies between the addresses or PIN codes appearing in tax invoices and e-way bills should not result in unjust GST penalties. In that decision, the Court had considered CBIC Circular No. 64/38/2018-GST dated 14 September 2018, which provides clarification regarding minor mistakes in e-way bills. The earlier judgment also discussed the Allahabad High Court’s decision in Libra International Limited Vs Assistant Commissioner, Commercial Tax and Another, concerning the effect of payment of tax and penalty and the deemed conclusion of proceedings under Section 129(5). The Madras High Court reiterated that a technical or minor variation between the registered business address and the actual dispatch location should not, by itself, justify an unjust penalty where the underlying transaction is genuine and the taxpayer otherwise complies with GST requirements.
Justice C. Saravanan observed that the issue raised by M/s K.S. Traders was squarely covered by the earlier decision in M/s Jindal Pipes Limited. The Court further noted that the earlier judgment had not been challenged in appeal and had therefore attained finality. Applying the reasoning adopted in that case, the High Court allowed the writ petition and directed that the amount already paid by the petitioner be credited to its electronic cash ledger for adjustment against future tax liabilities. No costs were awarded. The judgment reinforces that differences between the registered address shown in an invoice and the actual place of dispatch mentioned in an e-way bill must be examined in the context of the transaction rather than automatically treated as grounds for substantial penalties. It also highlights the importance of CBIC’s clarification on minor e-way bill errors and the principle that technical discrepancies should not impose an unjust financial burden on otherwise compliant taxpayers.
Cases Discussed
- M/s Jindal Pipes Limited, represented by its Authorized Signatory, Anand Garg Vs Deputy State Tax Officer (Int.), Roving Squad-I, Madurai (Madras High Court); W.P.(MD) No. 17211 of 2024; 25/07/2024 — Followed by the High Court for the principle that minor differences in the addresses or PIN codes recorded in tax invoices and e-way bills do not justify an unjust penalty under Section 129(5) of the GST enactments. The Court also considered CBIC Circular No. 64/38/2018-GST.
- Libra International Limited Vs Assistant Commissioner, Commercial Tax and Another (Allahabad High Court); 2020 SCC OnLine All 1523; (2021) 51 GSTL 284 — Cited within the reproduced Jindal Pipes judgment regarding the consequences of delayed challenges to detention orders and the statutory deeming provision under Section 129(5) following payment of tax and penalty.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
The petitioner, an importer of timber, had dispatched a consignment to a customer named ‘Revathi Vasudevan’ in Vilathikulam, Thoothukudi District, and had raised an e-Invoice on 23.06.2025 at about 18:42 hours. In the said e-Invoice, the petitioner had indicated the details of the supplier as the petitioner’s registered premises at Shencottah, namely, M/s.K.S.Traders, 1/755, Courtallam Road, Piranoor, Shencottah – 627 809.
2. The e-Way Bill, which was generated on the following day, i.e., 24.06.2025, also contains the aforesaid details, except that the place of dispatch has been mentioned as ‘Tuticorin, Tamil Nadu – 628 001’. The e-Way Bill also refers to the document details and Tax Invoice No.5 dated 23.06.2025, which had been generated by the petitioner at 18:42 hours on the same day.
3. Since there was a mismatch between the place of supply indicated in the e-Invoice dated 23.06.2025 and the place of dispatch mentioned in the e-Way Bill dated 24.06.2025, the consignment was intercepted and seized by the respondent. This action culminated in the issuance of orders in Form GST MOV-01 to GST MOV-09. The petitioner subsequently paid the tax and penalty amounts, as recorded in the release order issued in Form GST MOV-05.
4. The learned Additional Government Pleader appearing for the respondent submits that, once the amount has been paid, the issue has attained finality in view of Section 129(5) of the respective GST enactments.
5. On the other hand, the learned counsel for the petitioner places reliance on the decision of this Court in M/s.Jindal Pipes Limited, rep. by its Authorized Signatory, Anand Garg vs. Deputy State Tax Officer (Int.), Roving Squad – I, Madurai, 2021 (8) TMI 72, rendered on 25.07.2024 in W.P. (MD)No.17211 of 2024.
6. Having considered the submissions made by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, I am of the view that the issue is now squarely covered in favour of the petitioner in terms of the decision of this Court in M/s.Jindal Pipes Limited [cited supra], wherein this Court took note of the scheme of the Act and the Circular issued in this regard by the Central Board of Indirect Taxes and Customs (CBIC) dated 14.09.2018, vide Circular No.64/38/2018-GST.
7. The relevant portion of the order of this Court in M/s.Jindal Pipes Limited [cited supra] reads as under:-
”13. That apart, it is submitted that at best, the petitioner can be given a liberty in filing statutory appeal, if any.
14. Finally, the learned Additional Government Pleader for the respondent has drawn attention to the decision of the Hon’ble Division Bench of the High Court of Allahabad in Libra International Limited vs. Assistant Commissioner, Commercial Tax and another reported in 2020 SCC Online All 1523: (2021) 145 ALR (SUM 5) 3: (2021) 51 GSTL 284: ILR (2021) 1 All 702.
15. Specifically, it is submitted that in the said decision, the Hon’ble Division Bench of the High Court of Allahabad has held as follows:-
”15. The challenge sought to be raised to the order dated 15.2.2018 passed under Section 129(3) of the Act, 2017, having been made at a belated stage, we are of the view that the relief claimed in this regard in terms of relief clause (I), would be barred by laches; moreso, in the light of the fact that the petitioner claims to have deposited the entire amount of tax and penalty determined under the said order, and by virtue of the deeming provision under sub-section (5) all proceedings in respect of the notice specified under subsection (3) shall be deemed to be concluded.”
16. Having considered the submissions made by the learned counsel for the petitioner and learned Additional Government Pleader for the respondent, having considered the documents filed by the petitioner and having considered the Circular No.64/38/2018-GST dated 14.09.2018 issued by the Central Board of Indirect Taxes and Customs, the content, which has been extracted above, the Court is of the view that the petitioner cannot be mulcted with unjust penalty due to a minor discrepancy in the PIN code in the GST Registration and the Tax Invoices is to be construed as a minor violation of the provisions of respective GST enactments.
17. It is noticed that the difference in the address given in the E-Way Bill and the address in the Tax Invoices are only on account of the difference in the Head Office and the actual place from which the delivery was made. The petitioner had earlier obtained registration under VAT Act, for the place from where the despatch was made. The Tax Invoices, that has been raised by the petitioner, is from the same address at earlier obtained registration from VAT Authority.
18. It appears that the petitioner has a separate office from where the Tax Invoices are raised, whereas the despatches are made from the godown where the pipes manufactured by the petitioner’s factory are stored.
19. In my view, the imposition of penalty for technical venial breach of the provisions or the minor discrepancy in the variance in the address in the Tax Invoices and the E-Way Bill would not justify the penalty under Section 129(5) of the respective GST enactments. Although the petitioner has come long after the impugned order was passed, the Court is of the view that the philosophy under the respective GST enactments is not to levy unjust tax and burden on assessee, who is otherwise regular in paying tax and complies with the law.
20. Under these circumstances, the impugned order passed by the respondent is quashed. In view of this order, the respondent is directed to either refund the amount paid by the petitioner or allow the petitioner to take credit in their Electronic Cash Register or Electronic Cash for adjustment towards future tax liability of the petitioner.
This Writ Petition is disposed of with above directions. No costs. Consequently, connected miscellaneous petitions are closed.”
8. It is informed that the said order has not been appealed against and the issue has thus attained finality. That being the case, the Writ Petition deserves to be allowed and is accordingly allowed. The amount paid by the petitioner shall be credited to the electronic cash ledger of the petitioner, to be adjusted towards the petitioner’s future tax liability. No costs.
