Stock discrepancy during survey cannot justify confiscation under section 130; proceedings must follow sections 73 and 74.

Proceedings under section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017 were held unsustainable where a registered dealer was found with an alleged stock discrepancy during survey. The HC applied its earlier view that such a situation calls for action under sections 73 and 74, not confiscation under section 130, and noted that no contrary authority was produced. The impugned confiscation and penalty orders were quashed.

---

---

Issues: Whether proceedings under section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017 were sustainable against a registered dealer on the basis of stock discrepancy noticed during survey, or whether action ought to have been taken under sections 73 and 74 of the Act.

Analysis: The survey at the business premises allegedly revealed discrepancy in stock, and on that basis confiscation and penalty proceedings were initiated under section 130. The Court noted that the issue was no longer res integra and relied on its earlier decisions holding that where a registered dealer is found with a stock discrepancy during survey, the proper course is initiation of proceedings under sections 73 and 74 of the Act rather than resort to section 130. No contrary authority was shown to dislodge that view.

Conclusion: Proceedings under section 130 were held unsustainable, and the impugned orders were quashed in favour of the petitioner.

---