GST Act | S.130 Cannot Be Invoked For Excess Stock Found During Survey; Action Must Proceed U/S 73/74: Allahabad High Court
The Allahabad High Court held that Section 130 of the Goods and Service Tax Act, 2017 could not be invoked where excess stock was found at the time of survey While dealing with a case regarding a search conducted under the GST Act, where upon finding discrepancies, proceedings had been initiated against the petitioner under S. 130 of the Act, Justice Piyush Agarwal held “A...
The Allahabad High Court held that Section 130 of the Goods and Service Tax Act, 2017 could not be invoked where excess stock was found at the time of survey
While dealing with a case regarding a search conducted under the GST Act, where upon finding discrepancies, proceedings had been initiated against the petitioner under S. 130 of the Act, Justice Piyush Agarwal held
“A specific provision has been contemplated that if the goods are not recorded in the books of account, then the Proper Officer shall proceed as per the provision of Sections 73/74 of the GST Act. Once the Act specifically contemplates that action to be taken, then the provision of section 130 of the GST Act cannot be pressed into service.”
The Court held that once a specific action had been contemplated under the scheme of the Act, it was not open to the authorities to also invoke confiscation and levy of penalty under S. 130 of the Act. It relied on the judgement of the Allahabad High Court in Additional Commissioner, Grade - 2 & Another V. M/s Vijay Trading Company, which was later affirmed by the Apex Court, to hold the same.
“This Court in M/s Vijay Trading Company (supra) has categorically held that the proceedings under section 130 of the GST Act cannot be put to service in case excess stock is found at the time of survey,” held the Court.
Accordingly, the writ petition was allowed.
Case Title: M/s Prostar M Info Systems Limited v. State of UP and 3 others [WRIT TAX No. - 1469 of 2024]
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