diff --git a/erpnext/selling/page/point_of_sale/pos_item_details.js b/erpnext/selling/page/point_of_sale/pos_item_details.js
index e0abdd4f4c3..a0476ee6bda 100644
--- a/erpnext/selling/page/point_of_sale/pos_item_details.js
+++ b/erpnext/selling/page/point_of_sale/pos_item_details.js
@@ -216,22 +216,16 @@ erpnext.PointOfSale.ItemDetails = class {
 	}
 
 	make_auto_serial_selection_btn(item) {
-		if (item.has_serial_no || item.has_batch_no) {
-			if (item.has_serial_no && item.has_batch_no) {
-				this.$form_container.append(
-					`<div class="btn btn-sm btn-secondary auto-fetch-btn" style="margin-top: 6px">${__(
-						"Select Serial No / Batch No"
-					)}</div>`
-				);
-			} else {
-				const classname = item.has_serial_no ? ".serial_no-control" : ".batch_no-control";
-				const label = item.has_serial_no ? __("Select Serial No") : __("Select Batch No");
-				this.$form_container
-					.find(classname)
-					.append(
-						`<div class="btn btn-sm btn-secondary auto-fetch-btn" style="margin-top: 6px">${label}</div>`
-					);
+		const doc = this.events.get_frm().doc;
+		if (!doc.is_return && (item.has_serial_no || item.serial_no)) {
+			if (!item.has_batch_no) {
+				this.$form_container.append(`<div class="grid-filler no-select"></div>`);
 			}
+			const label = __("Auto Fetch Serial Numbers");
+			this.$form_container.append(
+				`<div class="btn btn-sm btn-secondary auto-fetch-btn">${label}</div>`
+			);
+			this.$form_container.find(".serial_no-control").find("textarea").css("height", "6rem");
 		}
 	}
 
@@ -416,18 +410,41 @@ erpnext.PointOfSale.ItemDetails = class {
 
 	bind_auto_serial_fetch_event() {
 		this.$form_container.on("click", ".auto-fetch-btn", () => {
-			let frm = this.events.get_frm();
-			let item_row = this.item_row;
-			item_row.type_of_transaction = "Outward";
+			this.batch_no_control && this.batch_no_control.set_value("");
+			let qty = this.qty_control.get_value();
+			let conversion_factor = this.conversion_factor_control.get_value();
+			let expiry_date = this.item_row.has_batch_no ? this.events.get_frm().doc.posting_date : "";
 
-			new erpnext.SerialBatchPackageSelector(frm, item_row, (r) => {
-				if (r) {
-					frappe.model.set_value(item_row.doctype, item_row.name, {
-						serial_and_batch_bundle: r.name,
-						qty: Math.abs(r.total_qty),
-						use_serial_batch_fields: 0,
-					});
+			let numbers = frappe.call({
+				method: "erpnext.stock.doctype.serial_no.serial_no.auto_fetch_serial_number",
+				args: {
+					qty: qty * conversion_factor,
+					item_code: this.current_item.item_code,
+					warehouse: this.warehouse_control.get_value() || "",
+					batch_nos: this.current_item.batch_no || "",
+					posting_date: expiry_date,
+					for_doctype: "POS Invoice",
+				},
+			});
+
+			numbers.then((data) => {
+				let auto_fetched_serial_numbers = data.message;
+				let records_length = auto_fetched_serial_numbers.length;
+				if (!records_length) {
+					const warehouse = this.warehouse_control.get_value().bold();
+					const item_code = this.current_item.item_code.bold();
+					frappe.msgprint(
+						__(
+							"Serial numbers unavailable for Item {0} under warehouse {1}. Please try changing warehouse.",
+							[item_code, warehouse]
+						)
+					);
+				} else if (records_length < qty) {
+					frappe.msgprint(__("Fetched only {0} available serial numbers.", [records_length]));
+					this.qty_control.set_value(records_length);
 				}
+				numbers = auto_fetched_serial_numbers.join(`\n`);
+				this.serial_no_control.set_value(numbers);
 			});
 		});
 	}
diff --git a/erpnext/stock/doctype/serial_no/serial_no.py b/erpnext/stock/doctype/serial_no/serial_no.py
index 274ce0f0d9d..1560db6a114 100644
--- a/erpnext/stock/doctype/serial_no/serial_no.py
+++ b/erpnext/stock/doctype/serial_no/serial_no.py
@@ -230,15 +230,17 @@ def get_pos_reserved_serial_nos(filters):
 
 	pos_transacted_sr_nos = query.run(as_dict=True)
 
-	reserved_sr_nos = set()
-	returned_sr_nos = set()
+	reserved_sr_nos = list()
+	returned_sr_nos = list()
 	for d in pos_transacted_sr_nos:
 		if d.is_return == 0:
-			[reserved_sr_nos.add(x) for x in get_serial_nos(d.serial_no)]
+			[reserved_sr_nos.append(x) for x in get_serial_nos(d.serial_no)]
 		elif d.is_return == 1:
-			[returned_sr_nos.add(x) for x in get_serial_nos(d.serial_no)]
+			[returned_sr_nos.append(x) for x in get_serial_nos(d.serial_no)]
 
-	reserved_sr_nos = list(reserved_sr_nos - returned_sr_nos)
+	for x in returned_sr_nos:
+		if x in reserved_sr_nos:
+			reserved_sr_nos.remove(x)
 
 	return reserved_sr_nos
 
@@ -254,12 +256,7 @@ def fetch_serial_numbers(filters, qty, do_not_include=None):
 	query = (
 		frappe.qb.from_(serial_no)
 		.select(serial_no.name)
-		.where(
-			(serial_no.item_code == filters["item_code"])
-			& (serial_no.warehouse == filters["warehouse"])
-			& (Coalesce(serial_no.sales_invoice, "") == "")
-			& (Coalesce(serial_no.delivery_document_no, "") == "")
-		)
+		.where((serial_no.item_code == filters["item_code"]) & (serial_no.warehouse == filters["warehouse"]))
 		.orderby(serial_no.creation)
 		.limit(qty or 1)
 	)