Banaras Industries Vs Union Of India And 4 Others (Allahabad High Court)
In the case of Banaras Industries Vs Union of India, the Allahabad High Court dealt with a writ petition challenging orders under Section 130 of the UPGST Act after excess stock was found during a search at the petitioner’s business premises. The petitioner argued that the stock was estimated visually without proper verification or video recording, and that proceedings should have been initiated under Sections 73 or 74 of the GST Act instead of Section 130. The court examined the application of Section 130, which is typically invoked for confiscation in cases of evasion or non-compliance. It emphasized that even if excess stock is found, tax liability should be determined under Sections 73 or 74, which outline procedures for assessing tax not paid or short-paid due to fraud or error. The court referenced previous judgments, including M/s Metenere Limited, which held that Section 130 cannot be used for assessing or determining tax merely based on excess stock. Consequently, the court found the application of Section 130 in this case to be inappropriate, reaffirming that proper tax assessment procedures must be followed under Sections 73 or 74 of the GST Act.
