SC dismisses Revenue's SL Pagainst Allahabad HC judgment affirming no penalty order u/s 130 of the CGST Act for stock discrepancies found during surveys

Last updated: 09 October 2025

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Quick Summary

The Supreme Court has ruled that stock discrepancies discovered during business surveys cannot be penalised under Section 130 of the GST Act, which deals with confiscation and penalties. Instead, such issues must be addressed through standard assessment and recovery proceedings under Sections 73 or 74 of the Act. This decision upholds a previous High Court judgment and clarifies the correct legal procedure for handling inventory differences found during tax surveys.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court in the case of Additional Commissioner Grade-2 & Another v. Dayal Product [Special Leave Petition (Civil) Diary No. 44119/2025, order dated September 01, 2025] held that where a stock discrepancy is discovered during the survey of a registered dealer, the initiation of confiscation and penalty proceedings under Section 130 of the GST Act is unsustainable. Such issues must be addressed through assessment and recovery proceedings under Sections 73 or 74. The SLP against the Allahabad High Court's judgment was dismissed, thereby upholding the High Court's view.

Citation :
Special Leave Petition (Civil) Diary No. 44119/2025, order dated September 01, 2025

Daily Limit Reached