Kvn Fmcg Pvt. Ltd. Vs State of U.P. (Allahabad High Court)
The Allahabad High Court allowed the writ petition filed by Kvn FMCG Pvt. Ltd. challenging proceedings initiated under Sections 122 and 130 of the CGST/UPGST Act, 2017 relating to alleged excess stock and violation of record-keeping provisions under Section 35 of the Act. The petitioner sought quashing of the show cause notice dated 12.02.2026, the confiscation order dated 27.02.2026, and Form GST DRC-07 dated 09.03.2026, along with refund of approximately Rs.64,91,007/- recovered during search proceedings.
The petitioner argued that proceedings under Section 130 could not be initiated merely for alleged violation of Section 35 without prior determination of tax liability under Sections 73 or 74 of the Act. Reliance was placed on several judgments including M/s Metenere Ltd., M/s Maa Mahamaya Alloys Pvt. Ltd., M/s Dayal Product, and Supreme Court proceedings arising from similar matters. It was further contended that the writ petition was maintainable at the show cause notice stage because the notice itself was issued without jurisdiction. Reliance was also placed on Whirlpool Corporation v. Registrar of Trade Marks, Siemens Ltd. v. State of Maharashtra, and HCL Infotech Ltd.
The respondents mainly opposed the writ petition on the ground of maintainability at the stage of show cause notice. However, the High Court observed that the legal position regarding initiation of proceedings under Section 130 without prior determination of tax liability under Sections 73 or 74 was already settled and no longer res integra.
