TaxTMI 
TaxTMI 
2025 (5) TMI 1894
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....s that the petitioner is a partnership firm and is engaged in the business of purchase and sale of machines, machinery part, hardware goods, etc. having GSTIN No. 09AAKFJ9517B1Z9 and its registered place of business is situated in Agra. During course of business, a search was conducted by respondent no. 3 on the premises of petitioner firm on 4.5.2022 and in pursuance thereof the proceedings under the GST Act were initiated by issuing notice dated 20.7.2022 under Section 130 read with Section 122 of CGST/UPGST Act by which proposed demand of tax of Rs. 7,17,560/- along with penalty of Rs. 7,17,560 and confiscation fine of Rs. 7,17,560 was raised against the petitioner, to which the petitioner submitted its reply on 27.7.2022 but being not s....
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....e and not proceedings under section 130 of the GST Act, read with rule 120 of the Rules framed under the Act. 9.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 statutory provisions what emerges is that Section 9 of the CGST is the charging section which provides for levy of tax on supplies of goo....
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....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 wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the ....
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....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 subsection (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 issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Wh....
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.... 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 goods in excess were found at the premises? (III). Whether the service of notice as claimed by the respondent satisfies the requirement....
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....artment 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 subsection (1) of Section 130 can at best be invoked by the department, however, in the present case, even assuming for the sake of argument, that the goods were lying in excess of the goods in record....