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TMI Blog2024 (8) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act.' 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. The impugned order dated 16.04.2024 passed by the respondent no. 1, the first appellate authority, as well as the impugned order dated 08.10.2018 passed by the respondent no. 2 cannot be sustained in the eyes of law. The same are hereby quashed - petition allowed. - Hon'ble Piyush Agrawal, J. For the Petitioner : Aditya Pandey For the Respondent : C.S.C. ORDER HON'BLE PIYUSH AGRAWAL, J. Heard Shri Aditya Pandey, learned counsel for the petitioner and Shri Arvind Kumar Mishra, learned Standing Counsel for the State - respondents. The instant writ petition has been filed challenging the impugned order dated 16.04.2024 passed by the respondent no. 1, the first appellate authority, as well as the impugned order dated 08.10.2018 passed by the respondent no. 2. With the consent of the learned counsel for the parties, the instant writ petition is being decided finally without calling for the counter affidavit. Learned counsel for the petitioner submits that the petitioner is a registered Company and is enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of goods is the date of issue of invoices or the date of receiving of the payment in respect to such supplies. 23. Section 35 (1) clearly provides that all the registered person are required to keep and maintain at the principal place of business a true and correct account of things specified in Clause (a) to (f). The Second proviso to Section 35 (1) ,Rule 56 and Rule 57 make it further necessary to keep the said documents as specified in Clause (a) to (f) in the electronic form. 24. Section 35 (6) of the said Act provides that in the event the person fails to keep their accounts for the goods or the services in accordance with the provisions of Sub-section 1of Section 35, the proper officer is empowered to determine the amount of tax payable on the goods or the services which are unaccounted for as if such goods or services had been supplied by such person and the provisions of Section 73 or 74 shall mutatis mutandis apply for determination of the said tax. 25. A perusal of the said section 35(6) makes it clear that proper officer is empowered to determine the taxes payable and while determining the said tax payable he is bound to determine the same in accordance with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under sub-section (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;B' of paragraph 35, the penalty that can be imposed is Rs. 10,000/- only. This Court also held that the demand for tax can be quantified and raised only in the manner prescribed in Section 73 or Section 74 of the Act, as the case may be. 12. In the light of what has been decided by this Court in the case of M/s Metenere Limited (Supra), it is clear that the entire exercise resorted to under Section 130 of the GST Act for assessment/ determination of the tax and the penalty is neither stipulated under the Act, nor can be done in the manner in which it has been done, more so, in view of the fact that the department itself had undertaken the exercise of quantifying the tax due, by taking recourse under Section 74. 13. As the entire tax has been determined and the penalty has been levied only on the basis of a survey by taking recourse under Section 130 of the GST Act and not taking a recourse to Section 74, the order impugned is clearly unsustainable. 15. On a plain reading of the allegations levelled against the petitioner with regard to the improper accounting of goods, the only stipulation contained in Clauses (ii) and (iv) of sub-section (1) of Section 130 can at best be i ..... 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