01Facts
The petitioner, a registered dealer under the Assam Goods and Services Tax Act, 2017 (AGST Act), challenged a notice in Form GST DRC-01 dated 9 January 2024 and the consequential adjudication order dated 30 April 2024, which determined tax, interest and penalty for FY 2018–19.
p. 3The DRC-01 stated that the alleged under-declaration of tax was identified by examining the petitioner’s annual return and comparing it with other GST returns, e-way bills and departmental records.
pp. 6–7No notice in Form GST ASMT-10 had been issued. The petitioner also asserted that, despite requesting a personal hearing, it was not granted one.
p. 3The State did not file an affidavit; it argued that the petitioner’s participation in the Section 73 proceedings and the availability of an appeal under Section 107 precluded writ relief.
p. 402Issues
i.Whether proceedings under Section 73 of the AGST Act, founded on discrepancies identified through scrutiny of returns, could be initiated without first issuing Form GST ASMT-10 under Section 61 and Rule 99.
pp. 4–5, 7ii.Whether the petitioner’s participation in the Section 73 proceedings or the availability of an appeal under Section 107 prevented the Court from setting aside the proceedings for non-compliance with the prescribed scrutiny procedure.
p. 803Law Applied
Section 61 of the AGST Act and Rule 99 of the Assam Goods and Services Tax Rules, 2017 require the proper officer, when scrutiny of returns reveals a discrepancy, to communicate it to the registered person in Form GST ASMT-10 and provide an opportunity to explain before taking further action; where no satisfactory explanation is provided, appropriate action, including under Section 73, may follow.
pp. 4–5The Court relied on PepsiCo India Holdings Pvt. Ltd. v. Union of India & Ors., W.P.(C) No. 6960/2023, 2025 SCC OnLine Gau 5406, for the proposition that Section 61 and Rule 99 cannot be bypassed when a Section 73 proceeding is founded on discrepancies noticed during scrutiny of returns.
pp. 5–6A later reply to a Section 73 show-cause notice does not substitute for the required scrutiny procedure or waive that statutory safeguard; the availability of an alternative remedy does not bar Article 226 review where statutory procedure governing the exercise of jurisdiction has been disregarded.
p. 8Provisions in the judgment · 7 · Linked ones open on LawLens
ASSAM GOODS AND SERVICES TAX ACT, 2017 Section 61Section 73Section 74Section 75Section 107
Central Goods and Services Tax Act, 2017 Section 61Section 73
04Reasoning
The DRC-01 showed that the alleged tax shortfall was calculated by examining the petitioner’s annual return and comparing it with other returns and departmental records; the respondents did not contend that the proceeding arose from an independent investigation or material unrelated to that examination.
pp. 6–7The Court therefore treated the demand as founded on discrepancies noticed through scrutiny of returns. Because no ASMT-10 notice had been issued, the officer had bypassed the procedure required by Section 61 and Rule 99 before commencing the Section 73 proceeding.
pp. 7–8The petitioner’s subsequent participation and the availability of an appeal did not cure that failure.
p. 805Holding
The Court held that where a proposed Section 73 demand is founded on discrepancies identified through scrutiny of returns, the procedure under Section 61 read with Rule 99 must first be followed.
pp. 7–8It allowed the writ petition and set aside the DRC-01 notice dated 9 January 2024 and the consequential order dated 30 April 2024.
p. 8The respondents remained at liberty to proceed in accordance with law, subject to limitation and other statutory requirements; the Court did not decide the merits of the alleged tax liability or the petitioner’s explanation.
pp. 8–9No order as to costs was made.
p. 9Original Court PDF
Ms R Ess Iron And Steel Pvt LtdvsUnion Of India And Ors
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