Section 62 GST Assessment Order Deemed Withdrawn After GSTR-3B Filed with Late Fee and Interest: Andhra Pradesh HC

Overview of the Case

The Andhra Pradesh High Court, in the matter of Sarath Chowdary Mullapud Vs Assistant Commissioner State Tax, delivered a significant ruling concerning the automatic withdrawal of best judgment assessment orders under the Goods and Services Tax framework. The decision reaffirms the statutory protection available to registered dealers who, despite initial non-compliance, subsequently file their pending returns along with applicable late fees and interest within the prescribed window.

This ruling carries considerable practical relevance for GST-registered assessees who may have missed return filing deadlines and subsequently received assessment orders under Section 62 of the GST Act, only to find that the tax authorities continued pressing for recovery of the assessed tax demand even after the return was duly filed.

Background and Facts of the Case

The assessee, a registered dealer operating under the GST framework bearing GSTIN No. 37AADFI7341D1ZK, failed to furnish the GSTR-3B return for the tax period of November 2022. This lapse in compliance triggered a series of actions from the State Tax authorities.

Sequence of Events

  1. The Assistant Commissioner, State Tax (first respondent), issued a notice to the assessee under Section 46 of the GST Act, directing the filing of the overdue return.
  2. The assessee did not respond to the notice or appear before the authorities.
  3. In the absence of any return or response, the first respondent proceeded to pass a best judgment assessment order dated 19.01.2023 under Section 62 of the GST Act.
  4. The assessee subsequently filed the GSTR-3B return for November 2022 on 17.02.2023, along with the requisite late fee and interest.
  5. Despite the return having been filed, the respondent authorities continued to insist that the assessee pay the tax demand raised through the assessment order dated 19.01.2023.

This continued insistence by the authorities on recovery of the assessed tax demand, even after the valid return was filed, prompted the assessee to approach the Andhra Pradesh High Court by way of a writ petition.

Section 46 – Notice for Failing to Furnish Return

Section 46 of the GST Act empowers the proper officer to issue a notice to a registered person who has failed to furnish any return within the stipulated due date. Such a notice grants the registered person a further period of fifteen days to file the return. If the person fails to comply even after such a notice, the proper officer may proceed under Section 62.

Section 62 – Assessment of Non-Filers of Returns

Section 62 of the GST Act confers authority upon the Proper Officer to undertake a best judgment assessment of the tax liability of a registered person who has failed to furnish returns, even after being served notice under Section 46. The proper officer considers all relevant material available or gathered and issues an assessment order. Importantly, this order must be issued within a period of five years from the date specified under Section 44 for furnishing the annual return for the financial year to which the unpaid tax pertains.

Section 62(2) – Deemed Withdrawal of Assessment Order

Section 62(2) is the crux of this judgment. It provides that: