The Allahabad High Court has set aside orders imposing tax liability and penalty under Section 130 read with Section 122 of the GST Act on the footing of excess stock found during investigations. Justice Ajay Bhanot, in Writ Tax No. 177 of 2025 (M/s Super Plastronics Private Limited vs. State of U.P., decided 23.04.2026), followed the Court's own ruling in M/S Ganga Brick Field (2026) and M/S Vijay Trading Company, holding that Section 130 proceedings cannot be put to service in such cases.
The significance of this decision lies in the fact that the ruling in M/S Vijay Trading Company has now been affirmed by the Supreme Court in SLP (Civil) Diary No. 5881/2025 vide judgment dated 04.04.2025. Further, the Supreme Court in M/s PP Polyplast Private Limited has independently held that the law is clear that Section 130 proceedings cannot be used when excess stock is found during survey. The State's Standing Counsel did not dispute the applicability of these precedents to the facts. The impugned adjudication order dated 30.06.2020 and appellate order dated 31.01.2024 were both set aside as having been passed in excess of jurisdiction conferred by law.
• 2026-juristway.com-1089-HC(Allahabad)-GST | High Court of Allahabad | Writ Tax No. 177 of 2025 | 23.04.2026