Tru Sound Pvt Ltd Vs State of Uttar Pradesh And 2 Others (Allahabad High Court)
In the case of Tru Sound Pvt Ltd Vs State of Uttar Pradesh & Others, the Allahabad High Court examined writ petitions challenging impugned orders passed by the Deputy Commissioner, SIB, Noida, and the Additional Commissioner (Appeal-I), Noida, under the UP GST Act. The petitioner’s business premises were surveyed on 28.01.2020, during which alleged excess stock was identified without a Panchnama being drawn. Subsequent notices under Sections 130 read with 122 of the UP GST Act were issued, and the petitioner submitted replies contesting the findings. Dissatisfied with the responses, the authorities levied tax and penalties through the impugned orders, which were upheld on appeal. The petitioner argued that the proceedings were incorrectly initiated under Sections 130/122, whereas Sections 73/74, which govern regular assessments, should have applied. The High Court noted that the issue was squarely covered by its earlier decision in M/s Vijay Trading Company Vs. Additional Commissioner, affirmed by the Supreme Court in Additional Commissioner Vs. Vijay Trading Company. Considering the binding precedent, the Court held that the impugned orders were unsustainable in law, quashed the tax and penalty levied, and directed the concerned authority to refund any amounts deposited by the petitioner along with 4% interest per annum from the date of deposit until the refund. The writ petition was allowed, emphasizing that adherence to the correct procedural provisions under the GST Act is mandatory and that irregular initiation of proceedings cannot be sustained even if tax collection has already occurred.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Rejoinder affidavit filed today is taken on record.
Heard Shri Gauransh Mishra, learned counsel holding brief of Shri Pranjal Shukla, learned counsel for the petitioner and learned ACSC for the State – respondents.
The instant writ petition has been filed against the impugned order dated 15.07.2020 passed by the Deputy Commissioner, SIB, Range – A, Noida as well as the impugned order dated 27.11.2024 passed by the Additional Commissioner, Grade – 2 (Appeal – I), Noida.
Learned counsel for the petitioner submits that on 28.01.2020, a survey was conducted at the business premises of the petitioner without there being any Panchnama and the alleged excess stock was found. Thereafter, notice under sections 130 read with section 122 of the UPGST Act was issued, to which the petitioner submitted reply. Not being satisfied with the reply, the impugned order dated 15.07.2020 was passed levying tax and penalty upon the petitioner. Aggrieved by the said order, the petitioner preferred appeal, which has also been dismissed without considering the material available on record.
Learned counsel for the petitioner further submits that the proceedings under sections 130 read with section 122 of the UP GST Act have illegally been initiated, instead, proceedings under sections 73/74 of the GST Act ought to have been initiated against the petitioner.
He further submits that the issue in hand is squarely covered by the judgement of this Court in M/s Vijay Trading Company Vs. Additional Commissioner & Another [Writ Tax No. 1278/2024, decided on 20.08.2024], which has been affirmed by the Apex Court in Additional Commissioner & Another Vs. Vijay Trading Company [SLP (Civil) Diary No. 5881/2025, decided on 04.4.2025].
Per contra, learned ACSC supports the impugned orders, but could not dispute the fact that issue in hand is covered by the judgement in M/s Vijay Trading Company (supra).
In view of the aforesaid facts & circumstances of the case as well as the judgement of this Court and the Apex Court in M/s Vijay Trading Company (supra), the impugned orders cannot be sustained in the eyes of law. The same are hereby quashed.
The writ petition succeeds and is allowed.
The authority concerned is directed to refund any amount deposited by the petitioner along with interest @ 4% per annum from the date of its deposit till the date of refund, within a period of two months from the date of production of a certified copy of this order.
