IMPORTANT POINT
The court established that the issuance of notice under Section 61 is mandatory when discrepancies are found, and failure to issue such notice invalidates subsequent adjudication.

ORDER :

Senthilkumar Ramamoorthy, J.

[PRAYER in W.P.No.15307 of 2024: Writ Petition filed under Article 226 of the Constitution of India, to issue a writ of Certiorari, to call for the records of the Respondent herein in Impugned order in GSTIN:33AAEAM5050F1ZZ/2018-19 dated 11.04.2024 and the consequential DRC 07 passed in Ref.No.ZD3304240861831 dated 11.04.2024 passed by the Respondent and quash the same.

PRAYER in W.P.No.15330 of 2024: Writ Petition filed under Article 226 of the Constitution of India, to issue a writ of Certiorarified Mandamus calling for the records leading to the issuance of Order-in Original reference No.ZD331223189373G dated 23-12-2023 FORM DRC-07 with connected proceedings reference No.GSTIN 33AGRPM6853A1ZC dated 23-12-2023, by the Respondent herein and afresh the same, and direct to consider the matter afresh, after giving full and fair opportunity to the Petitioner to submit its reply and after affording opportunity of personal hearing to the Petitioner.]

The facts relating to W.P.No.15307 of 2024 may be summarized as follows: a show cause notice dated 28.12.2023 was uploaded on the GST portal. The petitioner asserts that such show cause notice was not communicated through any other mode and, therefore, the petitioner was unaware of proceedings and could not participate in the same. Eventually, the impugned order dated 11.04.2024 was issued.

2. The facts relating to W.P.No.15330 of 2024 may be summarized as follows: the petitioner received a show cause notice dated 05.09.2023 calling upon him to show cause with regard to disclosing a lower sales turnover in comparison to the purchase turnover. Upon receipt of two reminders, by reply dated 06.11.2023, the petitioner informed the respondent that the sales turnover was reported in the subsequent month. The impugned order dated 23.12.2023 was issued in the said facts and circumstances.

Counsel and their contentions:

3. Oral arguments on behalf of the petitioner in W.P.No.15307 of 2024 were advanced by Ms. G. Vardini Karthik, learned counsel. As regards W.P.No.15330 of 2024, oral arguments were advanced by Mr. T.C. Prakash, learned counsel. In both writ petitions, Mr. C. Harsha Raj, learned Additional Government Pleader, advanced arguments on behalf of the respondent.

4. Ms. G. Vardini Karthik advanced the following contentions :

(i) The show cause notice discloses that proceedings were initiated against the petitioner on the basis of scrutiny of returns and the discrepancies noticed during such scrutiny. She contends that Section 61 of applicable GST enactments is attracted in relation to scrutiny of returns. She further submits that Section 61 should be read with Rule 99 of applicable GST Rules and that Rule 99 prescribes that a notice in Form GST ASMT-10 shall be issued to the registered person if discrepancies are noticed upon scrutiny of the returns of such person. By further submitting that the non-issuance of such notice vitiates the subsequent adjudication proceedings, she submits that the petitioner's failure to reply to the show cause notice does not stand in the way of the above contention.

(ii) In respect of the identical discrepancy in the petitioner's returns for assessment period 2019-20, learned counsel submits that notice in Form ASMT-10 was issued. In this regard, she relied upon the judgment of this in Court in CIT v. Hi Tech Arai Ltd, [2014] 368 ITR 577 (Mad), particularly paragraph 11 thereof, wherein the rule of consistency was endorsed.

(iii) By relying on Instruction No.2/2022-GST dated 22.03.2022(Instruction No.2/2022), learned counsel submitted that a standard operating procedure (SOP) was prepared for the conduct of scrutiny. She also pointed out that the nature of discrepancies specified in the show cause notice fall squarely within the scope of paragraphs 7 or 8 of the indicative list of parameters for scrutiny, which was annexed to Instruction No.2/2022 as Annexure B thereof.

(iv) By relying on paragraph 14 of the judgment of the Gauhati