GST Assessment Under Section 62 Stands Withdrawn After Filing GSTR-3B With Late Fee and Interest: Andhra Pradesh HC
Overview of the Case
The Andhra Pradesh High Court recently delivered a significant ruling in the matter of PSD Services And Innovation Vs Assistant Commissioner ST, affirming the legal protection available to registered assessees under Section 62(2) of the GST Act. The Court held that once a registered dealer files a valid GSTR-3B return along with the requisite late fee and interest, the best judgment assessment order issued under Section 62 is automatically deemed to have been withdrawn by operation of law.
This ruling carries considerable practical importance for GST-registered assessees who may have defaulted in filing returns within the prescribed time and subsequently received best judgment assessment orders from the tax authorities.
Background and Material Facts
The petitioner in this case — PSD Services And Innovation — was a registered dealer under the GST Act, holding GSTIN No. 37BBYPP2492P1ZD, enrolled on the rolls of State Tax Authorities.
The assessee failed to file its GSTR-3B return for the tax period of February 2023. In response to this default, the first respondent — the Assistant Commissioner of State Tax — issued a notice dated 25.03.2023 under Section 46 of the GST Act, calling upon the assessee to file the pending return.
Despite receiving this statutory notice, the assessee failed to respond or comply. This non-compliance prompted the Proper Officer to proceed against the assessee and pass a best judgment assessment order dated 17.04.2023 under Section 62 of the GST Act, determining the tax liability based on available and gathered material.
Subsequently, the assessee came forward and filed the GSTR-3B return for February 2023 on 21.06.2023, along with payment of the applicable late fee and interest. However, even after this filing, the respondent authorities continued to press for recovery of the tax amount as demanded under the assessment order dated 17.04.2023.
Procedural History
Aggrieved by the tax department's insistence on recovery despite the filing of returns, the assessee approached the Andhra Pradesh High Court by way of a writ petition. The core grievance was that the assessment order should have been treated as automatically withdrawn in view of Section 62(2) of the GST Act, and that the tax authorities had no legal basis to continue demanding payment under the said order once the return was duly filed with late fee and interest.
Legal Issue Before the Court
The primary legal question that arose for determination before the High Court was:
Whether a best judgment assessment order passed under
Section 62of the GST Act continues to remain in force and enforceable after the registered assessee subsequently files a valid return along with the applicable late fee and interest, in light of the express provisions ofSection 62(2)of the Act?