Return scrutiny under GST cannot rest on market price comparisons alone; notices beyond Section 61 were quashed.

GST-ASMT-10 notices issued under Section 61 of the Jharkhand GST Act were held beyond the scope of return scrutiny where they relied only on a comparison between the declared sale price and the prevalent market price. Section 61 authorises a preliminary verification of returns to identify discrepancies in the return itself and to seek an explanation before further action, but it does not permit scrutiny merely because the transaction value is below market price. As the notices did not point to any defect in the returns and did not show that the transactions were sham, they were quashed as without jurisdiction.

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Issues: Whether GST-ASMT-10 notices issued under Section 61 of the Jharkhand Goods and Services Tax Act, 2017, on the basis that the petitioners had shown a sale price lower than the prevalent market price, were beyond the scope of scrutiny of returns and liable to be quashed.

Analysis: Section 61 of the Jharkhand Goods and Services Tax Act, 2017 permits scrutiny of returns and related particulars only to verify the correctness of the return and to point out discrepancies noticed in the return. The scrutiny mechanism is a preliminary return-verification exercise, and if the explanation is unsatisfactory or the discrepancy is not corrected, further action may follow under the specified provisions. Here, the notices did not identify a discrepancy in the returns themselves but proceeded by comparing the declared transaction value with the prevalent market price of the goods. The statutory scheme treats the value of supply as transaction value, and a mere difference from market price does not, by itself, justify scrutiny proceedings under Section 61 unless the transactions are shown to be sham or otherwise unsupported by the returns.

Conclusion: The notices were held to be beyond jurisdiction and outside the scope of Section 61, and the petitioners succeeded.

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