Excess stock under GST should be addressed through demand proceedings, not confiscation under section 130, the Court held.

Excess stock detected during a survey at business premises was held to require recourse to the GST machinery for determination and recovery under sections 73 and 74, rather than confiscation under section 130 of the CGST Act read with rule 120. The Court reiterated that mere stock discrepancy does not justify initiation of section 130 proceedings on those facts. The impugned confiscation order was quashed, and relief was granted to the petitioner.

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Issues: Whether proceedings under section 130 of the CGST Act could be sustained where excess stock was found during survey, instead of resorting to proceedings under sections 73 and 74 of the GST law.

Analysis: The stock discrepancy was detected during survey at the business premises. The Court noted that, where excess stock is found, the proper course is to invoke the machinery for determination and recovery under sections 73 and 74 rather than confiscation under section 130 of the CGST Act read with rule 120 of the Rules. The Court also relied on its prior view that such a situation does not justify initiation of section 130 proceedings.

Conclusion: Proceedings under section 130 were held unsustainable on the facts found, and the impugned order was quashed, resulting in relief to the petitioner.

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