Juhi Alloys Private Limited Vs State of Up And 3 Others (Allahabad High Court)
The Allahabad High Court allowed the writ petition filed by Allahabad High Court against orders imposing tax, penalty, and fine under Sections 130 and 122 of the GST Act. The dispute arose after a search conducted on 13/14.03.2018 at the petitioner’s factory, where discrepancies relating to raw materials and semi-finished and finished goods were allegedly found. A confiscation order dated 22.11.2018 had earlier been quashed by the High Court in a previous round of litigation without remanding the matter back to the authority. Despite this, a fresh show cause notice was issued on 18.10.2019, followed by an order dated 23.11.2019 imposing tax, penalty, and fine on 16 items allegedly found in excess stock. The appellate authority partly reduced the liability through order dated 16.04.2024. The petitioner argued that proceedings under Section 130 could not be initiated merely on stock discrepancies found during a survey against a registered dealer and that proceedings, if any, should have been initiated under Sections 73 or 74 of the GST Act. The Court noted that the issue was already settled through earlier decisions, including S/s J.H.V. Steels Limited, S/s Dinesh Kumar Pradeep Kumar, and M/s PP Polyplast Private Limited, which held that stock discrepancies during surveys must be dealt with under Sections 73/74 and not under Section 130. Since the State could not show any contrary authority, the Court held that the impugned orders dated 16.04.2024 and 23.11.2019 were unsustainable in law and quashed them.
