In the present case, two Wrtit Petitions were filed before the Hon’ble Madras High Court, (i) the petitioner claims that show cause notice dated 28.12.2023 was only uploaded on the GST portal but not actually communicated to him, as such he was unaware of the proceedings and couldn’t participate in the same in the course of which order dated 11.04.2024 was issued. (ii), the petitioner also claims he received a notice for discrepancies in sales and purchase turnover, the petitioner informed the respondent that the sales turnover was reported in the subsequent month despite which order dated 23.12.2023 was issued. The petitioner contended that proceedings were initiated based on return scrutiny under Section 61 of applicable GST acts, which require a notice in Form GST ASMT-10. As such by non-issuance of the notice the entire proceeding is vitiated and such absence prejudices the taxpayer. The respondent state contended that scrutiny, audit, or inspection are not prerequisites for adjudication under Sections 73 or 74 and that the procedures under Sections 61 and 73 operate independently. It was further contended that any procedural defects that do not cause prejudice to the assessee can be overlooked under Section 160 of applicable GST Acts.
It was held by the Hon’ble Madras High Court that issuing a notice in Form ASMT-10 is mandatory when discrepancies are found during return scrutiny. However, non-issuance of this notice vitiates only the scrutiny process, not the adjudication under Section 73, as the latter can be based on other credible information. In the instant case it was found that, the absence of notice under Section 61 did not invalidate the adjudication proceedings under Section 73.
Accordingly, order dated 11.04.2024 was conditionally set aside on payment of 10% of the disputed tax and is remanded to subsequent adjudication as it was passed ex parte & order dated 23.12.2023 was set aside it was passed without considering the petitioner’s reply.
W&B Comments: The Hon’ble Calcutta High Court in Amex Service[1] had emphasized that the proper officer must issue Form GST ASMT-10, outlining discrepancies noticed during return scrutiny, before passing any order under Rule 99 and Section 61. The present decision by the Hon’ble Madras High Court further explores the circumstances under which Section 61(1) can be invoked, clarifying that while procedural lapses like omission of Form GST ASMT-10 are critical, they do not necessarily invalidate the adjudication if the taxpayer has had a fair chance to address the issues.
[1] 2024(6) TMI 663