High Court Quashes GST Penalty for Goods Delivered at Unregistered Address; Orders Refund to Electronic Cash Ledger

The Madras High Court has recently granted relief to a petitioner who received a GST penalty order for Goods delivered at an unregistered place.

The petitioner, M/s. Saraswathy Agency bought goods from a supplier in Chennai. The invoice was made for their registered office in Tirunelveli, but the goods were to be delivered to their other business location in Thoothukudi, which was not added as an official place of business in their GST registration at that time. As a result, the goods being transported on 22.04.2025 by the transporter were seized by the tax officer.

After this incident, the petitioner updated its GST registration to include the Thoothukudi address on 23.04.2025, and it was approved on 06.05.2025. However, the officer issued a notice in Form GST MOV-06, and after that, passed a final penalty order.

The petitioner approached the Madras High Court to quash the said order, calling it illegal, arbitrary and unsustainable. The petitioner requested the court to issue a direction to the Tax officer to refund the penalty amount of Rs 12,41,453 collected from the petitioner.

The Madras High Court referred to an earlier decision passed in the case of M/s.Smart Roofing Private Limited vs. The State Tax Officer (INT), Madurai, where the same issue occurred, and the court ruled in favour of the petitioner. Therefore, the court quashed the penalty order and directed the tax officer to credit the petitioner’s Electronic Cash Register.