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TMI Blog2024 (8) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... has held 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. 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 26.12.2023 passed by the respondent no. 1 under Section 130 read with Section 122 of UP GST Act, cannot be sustained in the eyes of law and same is hereby quashed. Petition allowed. - Hon'ble Piyush Agrawal, J. For the Petitioner : Praveen Kumar For the Respondent : C.S.C. ORDER HON'BLE PIYUSH AGRAWAL, J. 1. Heard Shri Vaibh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra, learned Standing Counsel for the State - respondents supports the impugned orders. 6 . After hearing learned counsel for the parties, the Court has perused the record. 7. It is not in dispute that survey was conducted at the business premises of the petitioner on 14.9.2018. It is also not in dispute that excess stock was found, which triggered the initiation of the present proceedings against the petitioner. On various occasions, this Court has held 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. 8. Recently, this Court in S/s Dinesh Kumar Pradeep Kumar (supra) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 provisions of Sections 73 74 of the Act. 26. In the present case, the proper officer was empowered to determine the liability of payment of tax in terms of the powers conferred under Section 35 (6) after resorting to the procedure as established under Section 74 of the Act. Section 74 of the Act reads as under: Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, all proceedings in respect of the said notice shall be deemed to be concluded. 27. Although in terms of the provisions of Section 35 (6), the unaccounted goods are ''deemed to be supplied' however, determination and quantification of the tax on the said ''deemed supply' has to be done in accordance with Section 73 or Section 74 of the Act.. 11. In the aforesaid case, this Court has specifically held that even if excess stock is found, the proceedings under section 130 of the UPGST Act cannot be initiated. 12. Further, in M/s Maa Mahamaya Alloys Pvt. Ltd. (supra), this Court has held as under:- 9. Considering the rival submissions made at the bar, the following questions which arise for determination; (I). Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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