Delayed Book Entries Backed by Invoice Do Not Attract Section 130 Confiscation: GSTAT Lucknow

GSTAT Lucknow dismissed the Revenue’s appeal and upheld the deletion of ₹1,89,000 in tax, penalty and redemption fine, finding a two-day lag in posting genuine purchases was not non-accountal of goods.

GSTAT Lucknow has held that a short delay in recording a genuine, invoiced purchase in the books is not a failure to account for goods under Section 130(1)(ii) of the CGST Act and cannot justify confiscation. [Sanjeev Kumar Niranjan v. Time Steels, 2026-juristway.com-3139-GSTAT(Lucknow)-GST]

The Bench of Santosh Kumar Srivastava, Member (Judicial), and Arvind Kumar, Member (Technical), dismissed the Revenue’s appeal against the order-in-appeal dated 13 Apr 2022.

During a survey on 20 Mar 2018, officers found stock exceeding the book balance at the premises of the respondent, a dealer in M.S. wire and flats. A show cause notice under Section 130 read with Section 122 valued the goods at ₹3,50,000, and the proper officer confirmed tax, penalty and redemption fine of ₹63,000 each. The first appellate authority set this aside.

The respondent explained that its accountant was on leave from 18 to 20 Mar 2018, that an inward supply of 9.56 MT was covered by an invoice dated 19 Mar 2018, and that the stock was reported in GSTR‑1 and GSTR‑3B. It added that the survey team estimated quantities by eye instead of weighing them, and relied on Additional Commissioner Grade-2 v. Dinesh Kumar Pradeep Kumar.

The Revenue argued that Section 130 is a standalone code, that liability arises the moment goods are found unrecorded at the time of survey, and that later invoices and returns could not cure the position.

The Bench found that the entries were present in the books and matched the returns. It held: “There is a vast legal distinction between a delayed entry of a genuine transaction and an unaccounted transaction designed for clandestine removal.”

It also noted that a separate assessment under Section 74 on the same survey had accepted most of the respondent’s explanations, leaving a variance of 1.750 MT. The Department, it held, cannot treat the same stock as a reconcilable variance under Section 74 and as a confiscable offence under Section 130. The order-in-appeal was upheld.

2026-juristway.com-3139-GSTAT(Lucknow)-GST