Dinesh Kumar Pradeep Kumar Vs Additional Commissioner Grade 2 And Another (Allahabad High Court)
The Allahabad High Court examined a writ petition challenging an order dated 24.03.2022 passed in a GST appeal for Assessment Year 2018–19. The petitioner, engaged in trading of cement and related materials, contended that during a survey conducted on 24.08.2018 under Section 67 of the UPGST Act, the authorities alleged excess stock based on eye estimation and proceeded to confiscate the goods. A notice was issued, and an ex-parte order dated 23.02.2019 was passed, which was later upheld in appeal.
Read SC Judgment in this case: Excess Stock Alone Cannot Justify GST Confiscation: SC Upholds HC Ruling
The petitioner argued that even if excess stock had been found, the proper course under the law was to initiate proceedings under Sections 73 or 74 of the UPGST Act for determination of tax liability. It was contended that proceedings under Section 130, read with Rule 122, were not applicable in such circumstances. The petitioner further relied on prior decisions of the High Court where similar issues had been addressed.
The Court noted that it was undisputed that the survey resulted in detection of alleged excess stock and subsequent proceedings were initiated. It referred to consistent judicial precedents holding that in cases where excess or unaccounted stock is found, the appropriate mechanism for determining tax liability is under Sections 73 or 74 of the Act and not under Section 130.
