Proceedings U/s 130 GST Act Can't Be Put To Service If Excess Stock Is Found During Survey Conducted At Business Premises: Allahabad High Court
Referring to the decision in case of Dinesh Kumar Pradeep Kumar Vs. Additional Commissioner [Writ Tax No. 1082 of 2022], the Allahabad High Court reiterated that even if excess stock is found at the business premises of the manufacturer, the proceedings u/s 130 of the UPGST Act cannot be initiated. As per Section 130 of the UPGST Act, the Government may require the person in charge of...
Referring to the decision in case of Dinesh Kumar Pradeep Kumar Vs. Additional Commissioner [Writ Tax No. 1082 of 2022], the Allahabad High Court reiterated that even if excess stock is found at the business premises of the manufacturer, the proceedings u/s 130 of the UPGST Act cannot be initiated.
As per Section 130 of the UPGST Act, the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. This provision lays down guidelines for confiscation of goods or conveyance and levy of penalty.
Single Judge Piyush Agrawal observed that “if excess stock is found, then proceedings under sections 73/74 of the GST Act should be pressed in service and not proceedings under section 130 of the GST Act, read with rule 120 of the Rules framed under the Act”. (Para 8)
Facts of the case:
Submitting that the stock at the time of survey was noted by the authority by eye estimation without any physical verification and no video recording of the alleged stock was made, the Petitioner/ Assessee had challenged the order passed by Respondent u/s 130 r/w s 122 of the UP GST Act, 2017.
Observations of the High Court:
The Bench accepted that excess stock was found at the time of survey conducted at the business premises, which triggered the initiation of the proceedings against the petitioner.
However, the Bench found that on various occasions, it was /held that if excess stock is found, then proceedings us 73/74 of the GST Act should be pressed in service and not proceedings u/s 130 of the GST Act, read with Rule 120.
The Bench therefore observed that the law is clear on the subject that the proceedings under section 130 of the GST Act cannot be put to service if excess stock is found at the time of survey.
Hence, the High Court quashed the order passed by the respondent u/s 130 r/w/s 122 of the UPGST Act and allowed the Assessee's petition.
Counsel for Petitioner/ Assessee: Aditya Gupta & Harsh Vardhan Gupta
Counsel for Respondent/ Revenue: ASGI & CSC
Case Title: Banaras Industries vs. Union of India
Case Number: Writ Tax No. - 1233 of 2024
Case Followed:
Dinesh Kumar Pradeep Kumar Vs. Additional Commissioner [Writ Tax No. 1082 of 2022]