Section 130 Not Applicable for Excess Stock Cases | HC

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

• Dinesh Kumar Pradeep Kumar v. Additional Commissioner Grade 2 [2024] 165 taxmann.com 166/105 GST 894/89 GSTL 239 (Allahabad) (para 6)
• Additional Commissioner, Grade – 2 (APPEAL) v. Dinesh Kumar Pradeep Kumar [SLP (Civil) Diary No. 5879 of 2025, dated 17-4-2025] (para 6), followed

List of Cases Referred to

• Dinesh Kumar Pradeep Kumar v. Additional Commissioner Grade 2 [2024] 165 taxmann.com 166/105 GST 894/89 GSTL 239 (Allahabad) (para 3)
• Additional Commissioner, Grade – 2 (APPEAL) v. Dinesh Kumar Pradeep Kumar [SLP (Civil) Diary No. 5879 of 2025, dated 17-4-2025] (para 3).