J.T.Steel Traders Vs State of U.P. And 2 Others (Allahabad High Court)
The Hon’ble Allahabad High Court in J.T. Steel Traders v. State of U.P. and 2 Others [WRIT TAX No. 1154 of 2022 dated July 28, 2025] held that proceedings under section 130 of the GST Act cannot be initiated solely on the basis of finding excess stock during survey; instead, proceedings under sections 73 or 74 should be adopted.
Facts:
J.T. Steel Traders (“the Petitioner”) is a registered company engaged in the business of sale and purchase of steel coils and other steel items. On August 8, 2019, the Respondent No. 3 conducted a survey at the Petitioner’s business premises, assessing stock on the basis of eye measurement and alleging excess stock.
The Petitioner contended that actual weighment was not done and that proceedings under Section 130 of the GST Act were not maintainable in such circumstances; instead, sections 73 or 74 ought to have been invoked.
The Respondent contended that the impugned orders were valid and defended the initiation of proceedings under section 130.
Aggrieved by the orders dated January 9, 2020 (Deputy Commissioner) and May 31, 2022 (Additional Commissioner), the Petitioner approached the Court by way of writ petition.
