NON PRODUCTION OF BOOKS OF ACCOUNTS IN WAREHOUSE

[Sadanand Bulbule]

Dear experts

The inspecting authority authorised under Section 67[1] of the GST Act inspects the declared warehouse wherein he finds some quantity of taxable goods not covered by valid documents. However in respect of such goods, the relevant documents like E-way bill and Tax invoices are kept in the main office of the taxpayer which precisely match the description of goods found in the warehouse and they are duly accounted for in the books of account both by the supplier and the recipient.

But the inspecting authority is refusing to accept such documents saying that it is an attempt to evade tax and initiates proceedings under Section 74[5] of the Act proposing to levy tax, interest and penalty.

Is such proceeding under Section 74[5] of the Act tenable in the eye of law? Any supporting rulings on this ?

AI Summary

Query on Legality of Proceedings Under GST Act Section 74(5) for Goods Documented Off-Site Lacks Merit An individual raised a query regarding the legality of proceedings initiated under Section 74(5) of the GST Act when an inspecting authority found taxable goods in a warehouse without on-site documentation, though these were accounted for at the main office. Respondents argued that Section 74 cannot be invoked without establishing non-payment or erroneous tax claims. They highlighted that Section 35(6) allows proceedings if goods are unaccounted for, but the goods in question were documented elsewhere. The consensus was that the notice lacks merit and relief might only be achieved at the appellate level.