JPR Projects Vs State of Andhra Pradesh
Date: August 19, 2025
Subject Matter
Best Judgment Assessment Order Deemed Withdrawn Upon Filing of Returns. No additional requirement to separately inform the proper officer.
Summary
The petitioner, a registered GST taxpayer, challenged a recovery action initiated by the Assistant Commissioner based on a best judgment assessment order dated February 7, 2024. This order was issued under Section 62 of the GST Act because the petitioner had failed to file their returns. The petitioner argued that after the assessment order was passed, they filed the relevant returns, paid the tax due, and also paid the late fee. According to Section 62(2) of the GST Act, this action should have resulted in the assessment order being "deemed to have been withdrawn."
The Assistant Commissioner did not dispute that the returns were filed and payments were made. However, the officer took the position that since the petitioner did not formally intimate the department of this compliance, the assessment order remained valid, and the recovery of the tax demand was justified.
The High Court reviewed Section 62(2) and found no such condition in the law. The provision is explicit: a best judgment assessment order is "deemed to have been withdrawn" by operation of law as soon as a registered person files a valid return within the prescribed time and pays the tax and late fee. There is no additional requirement to separately inform the proper officer for the deeming provision to take effect.
The court set aside the best judgment assessment order dated February 7, 2024. It ruled that since the petitioner had complied with the requirements of Section 62(2), the order was automatically withdrawn by operation of law. Consequently, the tax recovery initiated on the basis of that order was invalid. The court also directed the respondent to reverse the debit entry of Rs. 12,92,346, which had been adjusted against the petitioner's input tax credit, and to return the amount within four weeks. The court clarified that the tax authorities are still free to conduct a fresh assessment if they deem it necessary.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
The petitioner is a registered person under the GST Regime. The 2nd respondent-Assistant Commissioner passed a best judgment assessment order, dated 07.02.2024, under Section 62 of the GST Act. This order is said to have been passed on the ground that the petitioner had not filed its returns for the relevant period and a best judgment assessment order was being carried out.
2. The petitioner has now approached this Court, by way of the present Writ Petition, contending that the 2ndrespondent is seeking to recover the taxes, demanded under the assessment order, dated 07.02.2024, though the petitioner had filed returns for the relevant period and had paid the tax and late payment fee, as required under Section 62 of GST Act. The petitioner contends that upon filing of returns and payment of tax and late fee, the best judgment assessment order, is deemed, under Section 62(2) of the GST Act, to have been withdrawn.
3. Ms. Jyothi Ratna Anumolu, learned counsel appearing for the petitioner would contend that the petitioner, having complied with the requirements of Section 62(2) cannot be called upon to pay any tax, interest or penalty arising out of the assessment order, dated 07.02.2024, as the said order stands withdrawn, by virtue of operation of law, as set out under Section 62(2) of the GST Act.
4. The learned Government Pleader has placed written instructions issued by the 2ndrespondent-Assistant Commissioner. In the written instructions it is not disputed that the petitioner had filed the necessary returns and paid the tax and late fee payable under the returns. However, the 2nd respondent-Assistant Commissioner took the view that the filing of the returns and payment of tax and late fee had not been intimated to the 2nd respondent-Assistant Commissioner and consequently the tax demand raised under the order, dated 07.02.2024, would remain.
5. Section 62 of the GST Act, reads as follows:
Section 62. Assessment of non-filers of returns.-
(1) Notwithstanding anything to the contrary contained in section 73 or section 74 [or section 74A], where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.
(2) Where the registered person furnishes a valid return within [sixty days] of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.
2[Provided that where the registered person fails to furnish a valid return within sixty days of the service of the assessment order under sub-section (1), he may furnish the same within a further period of sixty days on payment of an additional late fee of one hundred rupees for each day of delay beyond sixty days of the service of the said assessment order and in case he furnishes valid return within such extended period, the said assessment order shall be deemed to have been withdrawn, but the liability to pay interest under sub-section (1) of section 50 or to pay late fee under section 47 shall continue.]
6. A perusal of Section 62(2) of the GST Act would show that any order passed under Section 62(1), would be deemed to have been withdrawn upon the registered person furnishing the valid returns within 30 days of the service of assessment order and payment of tax and late fee.
7. In the present case, these conditions having been complied with the order, dated 07.02.2024 is deemed to have been withdrawn and consequently no tax can be collected on the basis of such an order. There is no stipulation that the deeming clause would come into effect only after intimation to the proper officer.
8. It is submitted by the learned counsel for the petitioner that an amount of Rs.12,92,346/- has been adjusted against the input tax credit available to the petitioner towards recovery of the tax raised under the order, dated 07.02.2024. In view of this order, the said tax credit would have to be returned to the petitioner by reversing the debit entry made against the petitioner for the aforesaid sum. The said exercise shall be completed within a period of four weeks from the date of receipt of this order.
9. Accordingly, the Writ Petition is disposed of setting aside the order of assessment dated 07.02.2024 and leaving it open to the 2nd respondent to take up steps for assessment, if the 2ndrespondent is of the opinion that there is any such requirement. There shall be no order as to costs.
As a sequel, miscellaneous petitions pending, if any, shall stand closed.