Facts of the Case:

The petitioner challenged a notice dated 17.09.2025 issued under Section 130 of the UPGST Act, 2017 alleging liability to confiscation, and (ii) a seizure order dated 06.09.2025 in Form GST INS-02 issued under Rule 139(7). The petitioner also sought refund of ₹2,15,74,527/- allegedly recovered by the department under Section 74A(9) of the UPGST Act.

The petitioner argued that Section 130 proceedings cannot be initiated for alleged violations of Section 35 (maintenance of accounts and records), as such violations do not attract confiscation unless preceded by adjudication of tax liability, confiscation proceedings under Section 130 must follow determination of tax under Sections 73 or 74, relying on binding judgments in Metenere Ltd. v. Union of India, Maa Mahamaya Alloys Pvt. Ltd. v. State of U.P. The show cause notice was without jurisdiction. 

Issue: 

Whether a show-cause notice under Section 130 of the UPGST Act can be issued alleging confiscation without prior determination of tax liability under Sections 73/74 of the Act? Whether the writ petition is maintainable at the show-cause notice stage when the notice is alleged to be without jurisdiction?

Held that:

The Court held as under:

• Section 130 Can Be Invoked Only After Tax Determination Under Section 73/74 – The Court held that the legal position is no longer res integra. Consistent judicial precedent establishes that proceedings for confiscation under Section 130 cannot be initiated without first determining tax liability under Section 73 or Section 74. A notice under Section 130 cannot be issued for alleged violation of Section 35 (failure to maintain accounts), as such violation does not trigger confiscation proceedings. Since the impugned notice was issued without any prior determination of tax, it was without jurisdiction.
• Writ Petition Maintainable at SCN Stage When Notice is Without Jurisdiction – Placing reliance on Whirlpool and Siemens, the Court held that when a notice is patently without jurisdiction, the High Court can exercise its powers under Article 226, even at the stage of show-cause notice. Thus, the writ petition was maintainable.

The Court quashed the show-cause notice and seizure order and held that the department is at liberty to proceed in accordance with law by issuing appropriate notices under the correct statutory provisions.

Case Name: M/s Gospell Press Thru. Partner Mr. Rajiv Goyal Versus State Of U.P. Thru. Prin. Secy. State Tax Lko And 3 Others dated 13.11.2025

To read the complete judgment 2025 Taxo.online 2956