GST / Indirect Tax : Scope of Proceedings under Section 130 of the CGST Act, 2017 Explained

GST / Indirect Tax : Scope of Proceedings under Section 130 of CGST Act, 2017 Explained

The case of Nikhil Trade & Exports v. Additional Commissioner [2025] GCtR 1457 (Allahabad) has quashed the action of Tax Department and allowed the writ petition. It was held that proceedings under section 130 of the GST Act cannot be put to service in case excess stock is found at the time of survey.  

Section 35 of the CGST Act, 2017 clearly provides that every registered persons are required to keep and maintain at the principal place of business true and correct account of things as specified in clauses (a) to (f). Sub-section (6) of section 35 of the GST Act contemplates that if the registered dealer fails to account for the goods in accordance with the provision of sub-section (1), the Proper Officer shall determine the amount of tax payable on such goods that are not accounted for by such person and the provision of sections 73/74 of the GST Act, as the case may be, shall mutatis mutandis apply for determination of such tax. The GST Act is a complete Code in itself. A specific provision has been contemplated that if the goods are not recorded in the books of account, then the Proper Officer shall proceed as per the provision of sections 73/74 of the GST Act. Once the Act specifically contemplates that action to be taken, then the provision of section 130 of the GST Act cannot be pressed into service.