Nikhil Trade & Exports Vs Addititional Commissioner Grade-2 (Allahabad High Court)
The writ petition challenged two impugned orders dated 25.11.2024 and 24.05.2025 passed by the respondent authorities. The matter was heard with the consent of parties and decided finally without exchange of affidavits.
The petitioner contended that its business premises were surveyed on 23.02.2024, following which proceedings under Section 130 read with Section 122 of the GST Act were initiated. It was argued that the allegation of excess stock was made without actual weighment at the time of survey. The petitioner submitted that in such circumstances, the authorities ought to have proceeded under Sections 73 or 74 of the GST Act, and therefore, the initiation of proceedings under Section 130 was legally unsustainable.
The petitioner relied on several decisions of the Court, including M/s Vijay Trading Company Vs. Additional Commissioner, which was affirmed by the Supreme Court, as well as subsequent judgments following the same principle. It was also submitted that similar views had been taken in M/s PP Polyplast Private Limited Vs. Additional Commissioner, which too was affirmed by the Supreme Court. The State’s counsel did not dispute these legal propositions.
Upon consideration, the Court noted that the survey at the petitioner’s premises and the alleged discrepancies were not in dispute. The Court referred to Section 35 of the GST Act, which requires registered persons to maintain true and correct accounts at their principal place of business. Sub-section (6) of Section 35 provides that where goods are not properly accounted for, the Proper Officer must determine the tax payable, and the provisions of Sections 73 or 74 shall apply for such determination.
