Facts of the Case

The petitioner, Sri Rama Timber Depot, challenged the assessment order in Form GST ASMT-13 dated 13.08.2025, which had been passed by the Assistant Commissioner under Section 62 of the GST Act, 2017 for the tax period June 2025. The assessment was made on a best judgment basis without granting the petitioner an opportunity of hearing.

The petitioner contended that after issuance of the assessment order, it had duly filed the pending GST returns for the relevant tax period and also discharged the applicable tax, interest, and late fee. Despite such compliance, the department initiated recovery proceedings based on the assessment order, compelling the petitioner to approach the Andhra Pradesh High Court under Article 226 of the Constitution of India.

Issues Involved

  1. Whether a best judgment assessment order passed under Section 62 of the GST Act, 2017 survives after the registered person files the pending return and pays the applicable tax, interest, and late fee.
  2. Whether the department can continue recovery proceedings despite subsequent compliance by the taxpayer under Section 62.
  3. Whether the assessment order should be treated as withdrawn in accordance with the statutory provisions of the GST Act.

Petitioner's Arguments

  • The assessment order dated 13.08.2025 was passed without providing a reasonable opportunity to the petitioner.
  • After receipt of the assessment order, the petitioner filed the pending GST returns for June 2025 and paid the applicable tax, interest, and late fee.
  • Since the statutory requirements had been fulfilled, the assessment order under Section 62 ceased to have legal effect.
  • Therefore, the department could not legally proceed with recovery based on the impugned assessment order.
  • The petitioner sought quashing of the assessment order and consequential relief against the recovery proceedings.

Respondent's Arguments

The learned Government Pleader, on instructions from the department, submitted that:

  • The petitioner had already filed the required GST returns.
  • The applicable tax, interest, and other statutory dues had been paid.
  • In view of the provisions contained in Section 62 of the GST Act, the assessment order would automatically stand withdrawn upon such compliance.

Court Order / Findings

The Andhra Pradesh High Court observed that:

  • The assessment order had been passed under Section 62 of the GST Act, 2017.
  • The respondents themselves acknowledged that the petitioner had subsequently filed the pending returns and paid the tax, interest, and late fee.
  • Under Section 62, once the taxpayer files the pending return and complies with the statutory requirements within the prescribed period, the best judgment assessment automatically loses its effect.
  • Consequently, the assessment order dated 13.08.2025 stood withdrawn by operation of law.
  • Since no further cause survived, the writ petition was disposed of and all pending interlocutory applications were also closed.

Important Clarification

This judgment reiterates that:

  • A best judgment assessment under Section 62 is not intended to be permanent.
  • If the registered person subsequently files the pending GST return and pays the applicable tax, interest, and late fee within the statutory framework, the assessment order is deemed to be withdrawn.
  • Once such statutory compliance is made, the department cannot continue recovery proceedings based on the withdrawn assessment.
  • The decision reinforces the legislative intent of encouraging compliance rather than penalising taxpayers after compliance has been achieved.

Section Involved

  • Section 62 of the Central Goods and Services Tax Act, 2017 – Assessment of non-filers of returns.
  • Article 226 of the Constitution of India – Writ Jurisdiction of High Courts.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785408822_2424compressed.pdf

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