Case Details: Santosh Pigment and Chemical Industries Pvt. Ltd. vs. State of UP (2025) 35 Centax 174 (All.)
Judiciary and Counsel Details
- Piyush Agrawal, J.
- Shri Nishant Mishra, for the Petitioner.
Facts of the Case
The petitioner challenged proceedings initiated after a survey at its business premises where excess stock was recorded solely on the basis of eye estimation without any actual weighment. The Deputy Commissioner (SIB) passed an order under Section 130 read with Section 122 of the CGST Act and Uttar Pradesh GST Act, and the Additional Commissioner Grade-2 (Appeal) affirmed the same. The petitioner contended that, in the absence of actual physical verification, initiation of confiscation and penalty proceedings was impermissible and that only assessment proceedings under Sections 73 or 74 could be invoked. The petitioner relied upon Vijay Trading Company [2024 (89) G.S.T.L. 196 (All.) = (2024) 22 Centax 86 (All.)], as affirmed by the Supreme Court in [(2025) 30 Centax 214 (S.C.)]. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that, where the alleged excess stock was determined without actual weighment and only through eye estimation, recourse to confiscation proceedings under Section 130 read with Section 122 of the CGST Act and Uttar Pradesh GST Act was legally impermissible. The Court noted that the legal position, as laid down in Vijay Trading Company and affirmed by the Hon’ble Supreme Court, squarely applied to the present case, and the State did not dispute this proposition. The Court further held that, in such circumstances, the proper course available to the jurisdictional officer under the CGST Act was to initiate assessment proceedings under Sections 73 or 74, rather than resorting to confiscation. The original order of the Deputy Commissioner (SIB) and the appellate order of the Additional Commissioner Grade-2 (Appeal) were consequently quashed, and the writ petition was allowed.
List of Cases Cited
- Additional Commissioner v. Vijay Trading Company — (2025) 30 Centax 214 (S.C.) — Followed [Paras 5, 7]
- Vijay Trading Company v. Additional Commissioner — 2024 89 G.S.T.L. 196 (All.) = (2024) 22 Centax 86 (All.) — Followed [Paras 5, 7]
