Raghuvansh Agro Farms Ltd Vs State of U.P. (Allahabad High Court)
Summary: In the case of Raghuvansh Agro Farms Ltd vs State of U.P., the Allahabad High Court examined the legality of proceedings initiated under Section 130 read with Section 122 of the GST Act against the petitioner. The challenge was directed against two orders dated 25.12.2020 and 20.06.2019 passed by the respondent authorities.
The petitioner contended that during a survey conducted on 22.01.2019, the authorities alleged the presence of excess stock without conducting any actual weight measurement. Based on this, proceedings were initiated under Section 130 of the GST Act. The petitioner argued that such action was contrary to law since the proper course, in the event of discrepancies in accounts, should have been under Sections 73 or 74 of the GST Act, which deal with determination of tax liability in cases of non-payment or short payment of tax.
The petitioner’s counsel relied on several precedents from the same Court and the Supreme Court. It was pointed out that in M/s Vijay Trading Company vs Additional Commissioner & Another [Writ Tax No. 1278/2024, decided on 20.08.2024], the Court had ruled that Section 130 proceedings cannot be invoked merely on the ground of excess stock found during a survey. This decision was subsequently affirmed by the Supreme Court in Additional Commissioner, Grade-2 & Another vs M/s Vijay Trading Company [SLP (Civil) Diary No. 5881/2025, decided on 04.04.2025]. The same principle had been reiterated in State of U.P. & Another vs Additional Commissioner & Another [Writ Tax No. 1116/2023, decided on 12.05.2025] and M/s PP Polyplast Pvt. Ltd vs Additional Commissioner & Another [Writ Tax No. 1183/2024, decided on 30.07.2024], which was also upheld by the Supreme Court in SLP (Civil) Diary No. 5880/2025, decided on 15.04.2025.
