Mandarina Apartment Owners Welfare Association Vs Commercial Tax Officer/State Tax Officer (Madras High Court)
Summary: The Madras High Court in M/s Mandarina Apartment Owners Welfare Association v. Commercial Tax Officer ruled that issuing Form ASMT-10 is mandatory when discrepancies arise during the scrutiny of returns under Section 61 of the CGST Act, 2017. The case involved two writ petitions where the petitioner challenged orders passed without proper scrutiny notices. The court observed that the failure to issue ASMT-10 notices rendered the scrutiny invalid, though adjudication was still permissible as the petitioner was given an opportunity to respond. The court set aside both orders, remanding one for reconsideration and allowing the petitioner to submit additional replies. The ruling highlighted that the scrutiny of returns and adjudication processes under the CGST Act operate independently. While scrutiny requires a formal ASMT-10 notice, adjudication can proceed based on other grounds, including credible information. This case reinforces procedural safeguards in GST return scrutiny but emphasizes that scrutiny is not always a prerequisite for adjudication under Sections 73 and 74 of the CGST Act.
The Hon’ble Madras High Court in M/s Mandarina Apartment Owners Welfare Association v. Commercial Tax Officer/State Tax Officer [Writ Petition No.15307 & 15330 of 2024 dated July 16, 2024] held that the show cause notice lacked reference to scrutiny under Section 61 of the Central Goods and Services Tax Act, 2017. Instead, it cited data from GSTR-01 and GSTR-3B returns, highlighting discrepancies. Both the notice and the impugned order referred to a scrutiny under Section 61, fulfilling the conditions for issuing an ASMT-10 notice. The failure to issue the ASMT-10 rendered the scrutiny’s conclusions invalid for adjudication. However, since the petitioner was given an opportunity to show cause, adjudication was not solely based on scrutiny under Section 61, and no prejudice was caused. The matter was remanded for reconsideration.
