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Survey Excess Stock Cannot Trigger Confiscation Proceedings Automatically: Allahabad HC

Case Law Details

TaxGuru Citation
2025 taxguru.in 13037
Case Name
Mahesh Kumar Bhawnani Vs State of U.P. And 2 Others (Allahabad High Court)
Date of Judgement/Order
Only available for paid members
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Mahesh Kumar Bhawnani Vs State of U.P. And 2 Others (Allahabad High Court)

The Allahabad High Court considered a writ petition challenging an ex-parte order dated 19.03.2025 passed under the U.P. GST Act, 2017, whereby confiscation proceedings were initiated and a demand of ₹2,09,668 was raised for the tax period April 2024 to October 2024. The petitioner contended that surplus stock found during a survey under Section 67 of the U.P. GST Act could not be made the subject matter of confiscation proceedings, yet such action was taken without jurisdiction. It was further urged that the impugned order was passed without granting any opportunity of hearing and was never communicated to the petitioner, rendering it violative of principles of natural justice.

The Court noted that the order was passed ex-parte, without notice or hearing, which was evident on the face of the record. The petitioner relied on an earlier decision holding that excess stock cannot be subjected to confiscation, a view that had attained finality after dismissal of the Special Leave Petition by the Supreme Court. In light of this, the Court found that the petitioner had also made out a prima facie case of lack of inherent jurisdiction.

Without entering into the merits of the matter, the High Court set aside the impugned order and remitted the matter to the concerned authority to pass a fresh order after affording due opportunity of hearing to the petitioner within one month. The writ petition was accordingly allowed.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 20,886

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