Excess stock under GST must be assessed under tax determination provisions, not confiscation proceedings, where no further material exists.

Where excess stock is found during a survey under the Uttar Pradesh GST Act, tax liability and quantification are to be determined under the assessment scheme in Sections 73 and 74, not by resort to Section 130 for confiscation and penalty. The note also records that Section 35(6) contemplates determination of tax on unaccounted goods through the same statutory process. Applying its earlier decisions, the Allahabad HC held that mere excess stock, without more, does not sustain proceedings under Section 130; the invocation of that provision was therefore unsustainable and the impugned orders were quashed.

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Issues: Whether proceedings under Section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained on the basis of excess stock found during survey, and whether such cases had to be dealt with under the assessment provisions relating to tax determination.

Analysis: The survey at the business premises led to an allegation of excess stock. The settled view applied by the Court was that where excess stock is found, tax liability and quantification are to be determined under the scheme of Sections 73 and 74 of the Uttar Pradesh Goods and Services Tax Act, 2017, and not by invoking Section 130 for assessment and penalty. Section 35(6) also contemplates determination of tax on unaccounted goods in accordance with the process under Sections 73 and 74. The Court followed its earlier decisions to hold that mere excess stock, without more, does not justify resort to Section 130.

Conclusion: The invocation of Section 130 was held unsustainable, and the impugned orders were quashed.

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