HC Set Aside Proceedings Initiated u/s 130 Where Stock of Goods of Assessee Was Found in Excess During Survey

Case Details: Dinesh Kumar Pradeep Kumar v. Additional Commissioner Grade 2, State Tax - [2024] 165 taxmann.com 166 (Allahabad)

Judiciary and Counsel Details

• Piyush Agarwal, J.
• Aditya Pandey for the Petitioner.
• Ravi Shankar Pandey, CSC, Standind Counsel, for the Respondent.

Facts of the Case

The petitioner was engaged in the business of trading of Cement, Mauram and Saria. The business premises of petitioner was surveyed and only on the basis of eye measurement, it was held that the stock was excess and the goods were confiscated. Thereafter, notice was issued and the ex-parte impugned order was passed. It filed appeal against the said order but the same was also dismissed. It filed writ petition against the order and contended that survey was made under Section 67; therefore proceedings under Section 73 or 74 should have been initiated and impugned proceedings under section 130 was not permissible.

High Court Held

The Honorable High Court noted that the survey was made under Section 67 of the GST Act, 2017. Even if excess stock is found, the proceedings under Section 130 of the CGST Act, 2017 cannot be initiated. In the instant case, the entire tax was determined and the penalty was levied only on the basis of a survey by taking recourse under Section 130 of the CGST Act, 2017 and not taking a recourse to Section 73/74. Therefore, the Court held that the impugned proceeding under Section 130 was not permissible and liable to be set aside.