Issuance of Notice in Form ASMT-10 Is Mandatory If Discrepancies Are Noticed Upon Scrutiny of GST Returns | HC

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Form ASMT-10

Case Details: Mandarina Apartment Owners Welfare Association (MAOWA) v. Commercial Tax Officer/State Tax Officer - [2024] 164 taxmann.com 803 (Madras)

Judiciary and Counsel Details

  • Senthilkumar Ramamoorthy, J.
  • Ms G. Vardini Karthik & Prakash T.C. for the Petitioner. 
  • C. Harsha Raj, Addl. Govt. Pleader (Taxes) for the Respondent.

Facts of the Case

The petitioner received a show cause notice (SCN) calling upon him to show cause with regard to disclosing a lower sales turnover in comparison to the purchase turnover. It replied to the SCN but the order was passed against it. It filed writ petition and contended that the order was passed without issuing notice in Form ASMT-10.

High Court Held

The Honorable High Court noted that as per Section 61, upon fulfilment of two conditions, namely, selection of returns for scrutiny and discovery of discrepancies on such scrutiny, there is a mandatory obligation to issue ASMT-10. The notice requirement is intended to enable the registered person to explain or accept the discrepancy and pay tax and interest and thereby avoid a penalty.

Therefore, the ASMT-10 notice is mandatory if the two conditions set out above are satisfied. However, the consequence of not issuing the ASMT-10 notice, despite noticing discrepancies after selecting and scrutinizing returns, would be that it vitiates the scrutiny process, including the discrepancies noticed thereby and the quantification, if any, done in the course thereof.

But, in the instant case, the Court noted that the petitioner was provided an opportunity to show cause under Section 73 and it can’t be said that the adjudication was based only on the scrutiny under Section 61 or that the petitioner was prejudiced. The Court also referred matter for reconsideration since the Revenue agreed to issue a notice in Form ASMT-10 before proceeding further.

List of Cases Reviewed

List of Cases Referred to

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