Andhra Pradesh High Court: Late GSTR-3B Filing Triggers Deemed Withdrawal of Section 62 Assessment

Background of the Dispute

The Andhra Pradesh High Court in K Sandeep Naidu Vs Assistant Commissioner ST examined whether an assessment order passed due to non-filing of returns could survive once the assessee subsequently filed Form GSTR-3B along with applicable late fees, in light of Section 62(2) of the GST Act.

The writ petition concerned the GST tax period 2020-21, where the assessee, a works contractor operating as a sole proprietorship, was subjected to an assessment under Section 73(9) of the GST Act on the allegation of failure to file returns. Despite later compliance by way of filing returns and paying late fee, the department continued steps for recovery, which prompted the present challenge.

Core Facts Considered by the Court

Nature of Proceedings

  • An assessment order was issued for the period 2020-21.
  • The order was passed under Section 73(9) of the GST Act`, referring to non-filing of returns by the assessee.
  • The assessee approached the High Court asserting that:
    • Returns in Form GSTR-3B for the relevant months were ultimately filed.
    • Late fee was paid as required.
    • The underlying turnover was exempt, and thus no tax or interest liability arose.

Chronology of Demand and Return Filing

The Court reproduced a tabular statement detailing the dates of the demand orders and subsequent filing of Form GSTR-3B, along with particulars of late fee:

  • For October 2020:

    • Date of impugned demand order: 20.11.2020
    • Date of filing Form GSTR-3B: 22.01.2021
    • CGST late fee under Section 62(2): Rs. 310.00
    • SGST late fee under Section 62(2): **Rs. 310.00`

  • For January 2021:

    • Date of impugned demand order: 20.02.2021
    • Date of filing Form GSTR-3B: 18.03.2021
    • CGST late fee under Section 62(2): Rs. 0.00
    • SGST late fee under Section 62(2): Rs. 0.00

The table also showed total late fee figures of Rs. 310.00 under CGST and Rs. 310.00 under SGST.

On the basis of this data, the assessee argued that once returns were filed and late fee was paid, the assessment order grounded on non-filing could no longer sustain.

Scope of Section 62 – Best Judgment Assessment

Section 62 of the GST Act deals with assessment of non-filers of returns. Under this provision, where a registered person fails to furnish returns, the proper officer is empowered to pass a “best judgment” assessment order.

However, this power is subject to an important qualification under Section 62(2).

Deemed Withdrawal Under Section 62(2)

The High Court specifically referred to Section 62(2) of the GST Act, which provides that: