HC | Excess Stock Alone Can’t Trigger GST Confiscation Under Sec 130

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  • Last Updated on 18 August, 2025

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GST Section 130 excess stock survey GST

Case Details: J.T. Steel Traders vs. State of U.P. - [2025] 177 taxmann.com 234 (Allahabad)

Judiciary and Counsel Details

  • Piyush Agrawal, J.
  • Pranjal Shukla for the Petitioner.

Facts of the Case

The petitioner, registered under the CGST Act and the Uttar Pradesh GST Act, was subjected to a survey at its business premises during which excess stock was found. The petitioner alleged that the stock assessment was conducted on the basis of eye measurement and that no actual weighment of the stock was undertaken. Based on the finding of excess stock, proceedings under Section 130 were initiated against the petitioner. The matter was accordingly placed before the High Court.

HC Held

The High Court held that the law is settled that where excess stock is found during survey, proceedings under Sections 73 or 74 of the CGST Act and the Uttar Pradesh GST Act should be invoked, rather than proceedings under Section 130, read with Rule 120 of the relevant GST Rules. It reiterated that Section 130 proceedings, relating to confiscation of goods or conveyances, cannot be initiated solely on the ground of excess stock detected at the time of survey. In view of the settled legal position, the Court quashed the impugned orders, thereby reinforcing that excess stock findings during survey must be addressed through determination of tax liability under the assessment and adjudication provisions, not through confiscation proceedings.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied