2024 (8) TMI 513

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....t petition has been filed challenging the impugned order dated 11.05.2022 passed by the respondent no. 5 under section 130 read with section 122 of the UPGST Act as well as the impugned order dated 10.04.2023 passed by the first appellate authority, the respondent no. 4. 4. With the consent of the learned counsel for the parties, the instant writ petition is being decided finally without calling for the counter affidavit. 5. Learned counsel for the petitioner submits that the petitioner is a partnership firm and is engaged in the business of manufacture and sale of iron and steel (ingot, patri, channel, etc.). On 23.11.2021, an inspection/search under section 67 of the GST Act was conducted at the business premises of the petitioner b....

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.... Court has held that if excess stock is found, then proceedings under sections 73/74 of the GST Act should be pressed in service and not proceedings under section 130 of the GST Act, read with rule 120 of the Rules framed under the Act. 9. Recently, this Court in S/s Dinesh Kumar Pradeep Kumar (supra) has held as under:- "9. Recently, this Court in Writ Tax No. 1007 of 2022 (M/s Shree Om Steels Vs. Additional Commissioner Grade-2 and Another) along with connected cases has held in para nos. 10, 11, 12 & 13 as under:- "10. The issue in hand is covered by the judgement of this Court in Metenere Limited (supra), in which following observations have been made:- "22. From the perusal of the scheme of the Act and the....

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....he is bound to determine the same in accordance with the provisions of Sections 73 & 74 of the Act. 26. In the present case, the proper officer was empowered to determine the liability of payment of tax in terms of the powers conferred under Section 35 (6) after resorting to the procedure as established under Section 74 of the Act. Section 74 of the Act reads as under: Section 74 - Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wron....

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.... chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to i....

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....n of the tax on the said ''deemed supply' has to be done in accordance with Section 73 or Section 74of the Act.." 11. In the aforesaid case, this Court has specifically held that even if excess stock is found, the proceedings under section 130 of the UPGST Act cannot be initiated. 12. Further, in M/s Maa Mahamaya Alloys Pvt. Ltd. (supra), this Court has held as under:- "9. Considering the rival submissions made at the bar, the following questions which arise for determination; (I). Whether tax can be assessed/ determined in exercise of powers under Section 130 of the GST Act? (II). Whether penalty can be levied only on the allegations that at the time of verification of goods, the goo....

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....nalty is neither stipulated under the Act, nor can be done in the manner in which it has been done, more so, in view of the fact that the department itself had undertaken the exercise of quantifying the tax due, by taking recourse under Section 74. 13. As the entire tax has been determined and the penalty has been levied only on the basis of a survey by taking recourse under Section 130 of the GST Act and not taking a recourse to Section 74, the order impugned is clearly unsustainable. 15. On a plain reading of the allegations levelled against the petitioner with regard to the improper accounting of goods, the only stipulation contained in Clauses (ii) and (iv) of sub-section (1) of Section 130 can at best be invoked by th....