ASMT 10 is mandatory before proceedings, failure to issue the same in respect of would vitiate the entire proceedings: Madras High Court

ASMT 10 is mandatory before proceedings, failure to issue the same in respect of would vitiate the entire proceedings: Madras High Court

In the case of M/s VadivelPyrotech Private Limited (“The Petitioner) Vs. The Assisstant Commissioner (“The Respondent”) , Madras High Court held that ASMT 10 is mandatory before proceeding to issue GST DRC-01, failure to issue the same in respect of the discrepancies forming the subject matter in GST DRC-01  culminating in GST DRC-07 would vitiate the entire proceedings.

FACTS:

The notice required by section 61 of the CGST Act of 2017 in Form GST ASMT-10 on 22.12.2021was issued pointing out certain discrepancies between GSTR3B, GSTR 1 and GSTR 2A returns filed by the petitioner for the year 2018-19 calling upon the petitioner to pay taxes.

The petitioner in response paid the interest and furnished GST-DRC 03, while submitting his explanation in Form ASMT 11 on 18.01.2022 by furnishing the relevant details.

The petitioner was informed that an order dated 09.05.2022 was passed by the Respondent and a Summary of the Notice in GST DRC-01 and Order in GST DRC-07 had also been uploaded in the GST portal. On being so informed, the petitioner logged in to the GST portal and found that the Notice and Order had in fact been uploaded. Thereafter, the petitioner downloaded GST DRC-01 and GST DRC-07.

The petitioner contended that defects in GSTR DRC-01 are different from the defects/discrepancy which were pointed out in the Form ASMT 10 issued on 22.12.2021. The petitioner submits that the entire proceedings has been made behind their back and they were completely unaware of either the summary of the Notice in GST DRC-01 or the Order in GST DRC-07 until being informed by the Respondent. It was submitted that the entire proceedings stands vitiated for violation of principles of natural justice inasmuch as neither the show cause notice nor the orders under GST DRC-07 passed under Section 74 of the Act was served on the petitioner.

HELD:

It was held by the court that is thus clear that any proceeding in GST DRC-01A/1 culminating in an Order in GST DRC-07, if pursuant to Scrutiny under Section 61 of the TNGST Act ought to be preceded by issuance of Form ASMT 10. In the present case, though ASMT 10 was issued on 22.12.2021 pointing out certain discrepancies, the GST DRC-01 dated 15.02.2022 and the impugned order in GST DRC-07 dated 09.05.2022 are made on the basis of completely different from what was set out in Form ASMT 10 dated 22.12.2021.

Further ASMT 10 is mandatory before proceeding to issue GST DRC-01, failure to issue the same in respect of the discrepancies forming the subject matter in GST DRC-01 dated 15.02.2022 culminating in GST DRC-07 dated 09.05.2022 would vitiate the entire proceedings. It is trite law that when the Act prescribes the method and manner for performing an act, such act shall be performed in compliance with the said method and manner and no other manner.

Therefore the impugned order dated 09.05.2022 is set aside and the matter is remitted back to the Assessing Officer for redoing the assessment.