State of U.P. & Another Vs Additional Commissioner & Another (Madras High Court)
Madras High Court has dismissed a writ petition filed by the State of Uttar Pradesh and another authority, upholding an order that exempted a firm from tax, penalty, and fine on unaccounted mentha oil. The court ruled that proceedings under Section 130 of the GST Act are not applicable when excess stock is discovered during a survey; instead, action should be initiated under Sections 73 or 74 of the Act.
The petition challenged an order dated July 19, 2022, passed by the Additional Commissioner, which had partly allowed an appeal by the respondent, overturning the tax, penalty, and fine imposed on the value of mentha oil by an Enforcement Officer’s order dated April 22, 2021.
Background of the Case:
The dispute originated from an inspection conducted on September 13, 2019, at the business premises of the respondent firm. During this inspection, a team of officers allegedly discovered certain drums of mentha oil and caustic soda that were unaccounted for in the firm’s records. Following this finding, the goods were seized, and proceedings were initiated against the respondent under Sections 130 (confiscation of goods or conveyances and levy of penalty) and 120 of the Goods and Services Tax (GST) Act.
