Re-counting of stock not allowed if discrepancy was admitted during search: HC

Case Details: Sanjay Trading Company v. State of Madhya Pradesh - [2022] 140 taxmann.com 622 (Madhya Pradesh)

Judiciary and Counsel Details

• • Sheel Nagu and Maninder S. Bhatti, JJ.
  • Mukesh Agrawal, Adv. for the Petitioner.
  • Darhsan Soni, Adv. for the Respondent.

Facts of the Case

The search was conducted by the GST department in premises of the petitioner. The petitioner challenged search proceedings on ground that same was not carried out as per statutory provisions and discrepancies pointed out in stock were erroneous. It filed writ petition and requested for re-stocktaking.

High Court Held

The Honorable High Court observed that Panchnama was prepared on spot during search proceedings and it showed that search was carried out in presence of two persons and nephew of petitioner. Moreover, all three persons had signed Panchnama in token of it having been correctly recorded. Further, discrepancy in stock during stock taking, attracting tax and penalty, was admitted in these proceedings itself and due amount relating thereto was deposited voluntarily on date of search itself. Therefore there was no need for seizure of any goods and asking for stock taking again after some days was an afterthought as stock would not have remained untouched during period after search. Thus, the writ petition was liable to be dismissed and the Court held that the re-counting of stock was not allowed.