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TMI Blog2025 (1) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... ' even if excess stock is found, the proceedings under section 130 of the UPGST Act cannot be initiated.' Conclusion - The proceedings under Section 130 are not applicable for cases of excess stock found during a survey and that proper tax determination procedures must be followed. The impugned orders cannot be sustained in the eyes of law and 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. 1. Heard Sri Aditya Pandey, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel for the State-respondents. 2. By means of instant writ petition, the petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 35 (6) or 73 or 74 of the UPGST Act instead of Section 130 of the UPGST Act. 4. In support of his submission, he has placed reliance upon the judgment of this Court passed in the case of S/S Dinesh Kumar Pradeep Kumar Vs. Additional Commissioner Grade 2 and Another (Writ Tax No. 1082 of 2022), decided on 25.07.2024 . 5. Per contra, learned Additional Chief Standing Counsel supports the impugned order and submits that the proceedings were rightly been initiated against the petitioner. 6. After hearing the parties, the Court has perused the record. 7. It is not in dispute that the survey was made on the business premises of the petitioner by the S.I.B. on 25.10.2018 and on the said survey, it was alleged that the excess stock was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Subsection 1 of 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, 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 74of the Act.. 11. In the aforesaid case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in Column 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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