Validity of Improper ASMT 10 & Section 61 of CGST, Goods and Services Tax - GST

[VARDHMAN DOOGAR]

Dear Experts,

We have received an ASMT-10 for one of our clients. The notice is not proper as no discrepancy in any return has been pointed out in attachment. No table showing any discrepancy have been intimated.

Only the officer has intimated that assessment proceedings are initiated & for the above, the following documents are required where he has asked for complete books of accounts including Fixed assets, stock details, Debtors/creditors list. etc.

Further, he has asked for personal hearing for the same, which failing to do so which result in ex parte of the case.

Is the personal hearing & document requirement valid as per Section 61 of CGST?

Posts / Replies

[Ashika Agarwal]

No. Such type of Notice is beyond the scope of Section 61.

This section is limited to scrutiny of return and related particular furnished to verify the correctness of the return. Section 37 & 38 talks about 'furnishing' and Section 39 deals with "filing of return".

For calling the documents, Proper Officer have to invoke section 65 (Audit) or 70 (Summon).

[KASTURI SETHI]

Sub-section 3 of Section 61 of the CGST Act empowers the Proper Officer to take action under Sections 65, 66, 67, 73, 74.So Proper Officer can call for any records for scrutiny of returns. Returns are based on books of accounts. So proper Officer can call for any record or information. Proper Officer is affording an opportunity to you to defend yourself by way of personal hearing. Hence answer to your question is yes.

[Amit Agrawal]

I agree with the views of Ms. Ashika Agarwal Ji.

Kindly refer to an elaborate discussion we had on this issue under Issue-ID:- 118428 bearing subject-line - SCN RECEIVED Notice Under Sec 61-FY 2017.18

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

Rather than picking holes in ASMT-10 and challenging the validity of the same, wise approach is to submit the records required by the department. Why to invite other Sections ?

We can not forget that Govt. is the ruler and we are being ruled over. One cannot fight with Govt. just for a trivial issue i.e. submission of books of accounts.

Assessee should fight on merits rather than on the issue of 'whether the department can ask for the records or not under Section 61 ?

Whether to agree with my honest, sincere and impartial advice or not , it is your will as well as right.

[Shilpi Jain]

It is time that the department also pays attention to the various provisions under the law and abides by it. These kind of challenges to the documents / notices issued by them will only make the department officers wise which will lead to a better implementation of the law.

[Padmanathan Kollengode]

Dear Querist,

Practically, I would suggest not respond to such improper ASMT-10 at all. No demand can be made by the department without issuing SCN u/s 73 or 74.

Dear Kasturi Sir,

I respectfully disagree with you sir. Section 65,67,70 etc have different checks and balances built into them [for eg:-

Sec. 67 requires "reason to believe" and only officer ranking JC and above can only invoke, Instruction No 2/2022-23 (GST investigation) issued for Sec. 70 summons etc.]

These checks and balances cannot simply be bypassed by way of issuing ASMT-10 which has a very narrow and restrictive scope of scrutiny of returns.

Even under Income Tax there are precedence that a limited scrutiny assessment cannot be enlarged to full scrutiny by officer.

Such by-passing would be nothing but harassment of taxpayers in my humble view.

[Padmanathan Kollengode]

I would like to add that it is a well-settled principle that Taxmen cannot carryout any fishing/ roving enquiries.

[Amit Agrawal]

I most respectfully disagree with Shri Kasturi Sir, more specifically with the claim that 'Govt. is the ruler and we are being ruled over'.

In my view, Govt. and its officers are serving public (including tax-payers) and they are definitely not rulers. And Govt. and its officers are bound to follow law & prescribed procedures and if they do not, public (including tax-payers) have right to ignore non-foundational notices such as subject notice under discussion here.

At-least, I will ignore such notices .....

But, I also understand what Shri Kasturi Sir is advising is, what is referred as a 'practical approach'. And as said by him, it is tax-payer's right to opt for such 'practical approach' or defend himself judicially if need so arise.

Ultimately, these are the decisions which concerned tax-payer needs to take.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion. And I respect contrary views.

[KASTURI SETHI]

A gulf between 'theory' & 'practice' will always remain.

[KASTURI SETHI]

Sh.Padamanathan Kollegode Ji & Sh.Amit Agrawal Ji,

I have no objection with difference of opinion. Difference of opinion always leads to search and search leads to innovative ideas. This is a fact. So difference of opinion must be welcomed wholeheartedly. This is from the core of my heart.