2025 (2) TMI 928 - HC - GST

Imposition of tax and penalty u/s 130 of the GST Act - HELD THAT - It is not in dispute that the survey was conducted at the business premises of the petitioner on 29.05.2018 in which the alleged discrepancy in stock was found. On the said basis the proceedings were initiated against the petitioner under section 130 of the GST Act. The issue in hand is no more res integra . This Court in various cases has held that at the time of survey if some discrepancy in stock is found against the registered dealer then the proceedings under sections 73/74 of the GST Act ought to have been initiated instead of section 130 of the GST Act. Reference may be had to S/s Dinesh Kumar Pradeep Kumar 2024 (8) TMI 71 - ALLAHABAD HIGH COURT M/s Maa Mahamaya Alloys Private Limited 2023 (3) TMI 1358 - ALLAHABAD HIGH COURT and M/s Shree Om Steels 2024 (7) TMI 1205 - ALLAHABAD HIGH COURT . The impugned order dated 02.04.2024 passed by the Additional Commissioner Grade - 2 Kanpur as well as the impugned order dated 10.09.2018 read with order dated 05.08.2020 passed by the respondent no. 2 under section 130 of the GST Act cannot be sustained in the eyes of law - Petition allowed.

Summary

The Allahabad High Court, in a case involving the imposition of tax and penalty under section 130 of the GST Act, found that proceedings should have been initiated under sections 73/74 of the GST Act instead. The Court referred to previous judgments supporting this view. The impugned orders were quashed as they were not legally sustainable. The writ petition was allowed in favor of the petitioner.