Section 130 Not Applicable for Excess Stock Cases | HC

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  • Last Updated on 7 June, 2025

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GST excess stock confiscation

Case Details: Raj Steel vs. State of U.P. - [2025] 175 taxmann.com 111 (Allahabad)

Judiciary and Counsel Details

  • Piyush Agrawal, J.
  • Sanyukta Singh & Chhaya Gautam for the Petitioner.

Facts of the Case

The petitioner filed a writ petition challenging two impugned orders issued by jurisdictional GST authorities under Section 130 of the CGST and Uttar Pradesh GST Act. The dispute arose from proceedings initiated for alleged excess stock found during inspection, which the authorities sought to classify as grounds for confiscation of goods and vehicle, invoking penal action under Section 130. The petitioner contended that such invocation was contrary to law and relied on a prior judgment of the same Court in Dinesh Kumar Pradeep Kumar v. Additional Commissioner Grade 2 [2024] 165 taxmann.com 166 (Allahabad).

High Court Held

The Hon’ble High Court held that, as laid down in Dinesh Kumar Pradeep Kumar (supra), where excess stock is found, the proper course of action lies under Section 73 or Section 74 of the CGST and Uttar Pradesh GST Act, and not under Section 130. It was observed that confiscation proceedings under Section 130 could not be triggered. Following the precedent, the Court quashed the impugned orders passed by the GST authorities and directed that any amount deposited by the petitioner be refunded in accordance with law.

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