The issuance of notice in Form ASMT-10 is mandatory if discrepancies are found in the scrutiny process, affecting the validity of subsequent adjudications.

COMMON ORDER

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 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 High Court in Pepsico India Holdings (P.) Ltd. v. Union of India [2023] 157 taxmann.com 428, learned counsel contends that the issuance of notice in Form GST ASMT-10 is mandatory in all cases wherein scrutiny of returns is undertaken. For the same proposition, learned counsel also referred to and relied upon the judgment of this Court in Vadivel Pyrotech (P.) Ltd. v. Assistant Commissioner (ST) (Vadivel Pyrotech)[2022] 144 taxmann.com 179 [Madras].

(v) By relying on the judgment of the Allahabad High Court in Graziano Trasmissioni v. Goods and Services Tax (Graziano Transmissioni)[2024] 163 taxmann.com 126 (Allahabad), particularly paragraphs 73, 75, 94, 112, 117 & 119 thereof, she contended that the Division Bench of the Allahabad High Court held that scrutiny and audit are necessary preparatory works before adjudication. She also pointed out that the notification extending the period of limitation under Section 168A was upheld in the said judgment because scrutiny and audit work