The Andhra Pradesh High Court has clarified the operation of Section 62(2) of the CGST/APGST Act, holding that a best judgment assessment order is deemed withdrawn once the assessee files the pending returns along with late fee and interest. This judgment reinforces the statutory mechanism for automatic withdrawal of assessment orders, providing relief to taxpayers facing arbitrary demands.
Background & Facts
The Dispute
The petitioner, Sahasra Consultants, represented by its proprietor Muralikrishna Dhanekula, is a registered dealer under the CGST/APGST Act (GSTIN No. 37CFIPD5019K1ZD). The petitioner failed to file GSTR-3B returns for the tax period January 2024. The 1st respondent, the Assistant Commissioner ST, Arundalpet Circle, Guntur, issued a notice under Section 46 of the CGST Act on 20.04.2024, requiring the petitioner to file the pending returns. Despite the notice, the petitioner did not comply, leading the respondent to pass a best judgment assessment order under Section 62 of the CGST Act on 20.06.2024.
Key Facts
- The petitioner filed GSTR-3B returns on 24.07.2024, remitting the applicable late fee and interest.
- The impugned assessment order dated 20.06.2024 was passed without a Document Identification Number (DIN) and without the signature of the assessing authority.
- The petitioner contended that the assessment order should be deemed withdrawn under Section 62(2) of the CGST Act upon filing the returns with late fee and interest.
- The respondents insisted on payment of the tax demanded under the impugned order despite the filing of returns.
Procedural History
- 20.04.2024: Notice issued under Section 46 of the CGST Act for non-filing of GSTR-3B returns.
- 20.06.2024: Best judgment assessment order passed under Section 62 of the CGST Act.
- 24.07.2024: Petitioner filed GSTR-3B returns along with late fee and interest.
- 2026: Writ Petition (WP No. 16164/2026) filed before the Andhra Pradesh High Court challenging the assessment order.
- 01.07.2026: Judgment pronounced by the High Court.
Relief Sought
The petitioner sought:
- A Writ of Mandamus declaring the assessment order dated 20.06.2024 illegal, arbitrary, and contrary to Section 62(2) of the CGST Act.
- Quashing of the demand notice dated 20.06.2024.
- Stay of recovery proceedings pending disposal of the writ petition.
The Legal Issue
The central question was whether a best judgment assessment order passed under Section 62(1) of the CGST Act is deemed withdrawn under Section 62(2) upon the assessee filing the pending returns along with late fee and interest, even if the returns are filed beyond the 60-day period specified in the statute.
Arguments Presented
For the Petitioner
- The petitioner relied on Section 62(2) of the CGST Act, which provides that if the assessee files a valid return within 60 days of the assessment order, the order shall be deemed withdrawn.
- It was argued that the filing of returns on 24.07.2024, albeit beyond the 60-day period, should still trigger the deeming provision, as the statute does not explicitly bar late filings.
- The petitioner cited a judgment of the Madras High Court (Madurai Bench) in WP (MD) No. 18740 of 2024, which condoned the delay in filing returns and held that the assessment order would be deemed withdrawn.
- It was further contended that the impugned order was passed without a DIN and without the signature of the assessing authority, rendering it invalid.
For the Respondent
- The learned Assistant Government Pleader for Commercial Tax submitted that the petitioner had filed the returns along with late fee and interest, but did not contest the applicability of Section 62(2).
- The respondent did not dispute the filing of returns but left the matter to the court’s discretion.
The Court's Analysis
The Court examined the provisions of Section 62 of the CGST Act, which empowers the Proper Officer to assess the tax liability of a registered person to the best of his judgment if the person fails to file returns. The Court noted that Section 62(2) provides a mechanism for automatic withdrawal of the assessment order if the assessee files a valid return within 60 days of the order.
"As per Section 62 of GST Act the Proper Officer may proceed to assess the tax liability of the registered 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 (05) years from the date specified under Section 44 for furnishing of annual return for the financial year to which the tax not paid relates to."
The Court observed that the petitioner had filed the returns on 24.07.2024, along with the late fee and interest, and this fact was not disputed by the respondent. The Court relied on the judgment of the Madras High Court (Madurai Bench) in WP (MD) No. 18740 of 2024, which held that the assessment order would be deemed withdrawn upon filing of returns, even if the filing was delayed. The Andhra Pradesh High Court had previously followed this judgment in W.P.No. 20705 of 2025 (M/s. Brothers Engineering and Errectors Limited v. State of Andhra Pradesh).
The Court held that the benefit of Section 62(2) must be extended to the petitioner, as the returns had been filed, albeit beyond the 60-day period. The Court did not address the issue of the DIN or the lack of signature on the assessment order, as the order was set aside on substantive grounds.
The Verdict
The Court allowed the writ petition and set aside the best judgment assessment order dated 20.06.2024. The order was deemed withdrawn under Section 62(2) of the CGST Act upon the petitioner filing the returns with late fee and interest. There was no order as to costs, and all pending applications were closed.
What This Means For Similar Cases
Automatic Withdrawal of Assessment Orders
- The judgment reinforces that Section 62(2) of the CGST Act operates as an automatic mechanism for withdrawal of best judgment assessment orders upon filing of returns, even if the filing is delayed.
- Practitioners should argue that the deeming provision under Section 62(2) is not strictly limited to the 60-day period, especially if the delay is condoned by judicial precedent.
Judicial Precedent and Consistency
- The reliance on the Madras High Court judgment (WP (MD) No. 18740 of 2024) highlights the importance of consistent judicial interpretation of statutory provisions across jurisdictions.
- Taxpayers can cite this judgment to argue for the withdrawal of assessment orders in similar cases, even if returns are filed beyond the statutory period.
Procedural Compliance by Tax Authorities
- The judgment underscores the need for tax authorities to comply with procedural requirements, such as issuing orders with a DIN and proper signatures. However, substantive compliance with statutory provisions (e.g., Section 62(2)) may override procedural lapses in certain cases.
