Assessment under Section 65 of CGST Act: Legal Overview

Assessment Under Section 65 of the CGST Act, 2017: A Comprehensive Legal Analysis and Professional Overview

Introduction

As advocates practicing in the field of indirect taxation, we are increasingly confronted with assessment proceedings under Section 65 of the Central Goods and Services Tax Act, 2017. This provision has emerged as one of the most frequently invoked enforcement mechanisms by the revenue authorities, particularly in cases where our clients have failed to file returns within the statutory timelines.

The legal challenges presented by Section 65 assessments require careful navigation of procedural safeguards, substantive defences, and strategic appellate advocacy. This practice guide examines the legal framework, common pitfalls in assessment orders, and effective strategies for defending clients’ interests.

This article aims to give a general overview of the assessment, adjudication, recovery framework and appeal described in the Central Goods and Services Tax Act, 2017 (CGST Act), as well as to outline potential problems that taxpayers may encounter.

STATUTORY FRAMEWORK:

Legislative Intent and Scheme

Section 65, titled “Assessment of non-filers of returns,” constitutes a protective assessment mechanism within the GST legislative architecture. The provision operates on the principle that failure to file returns should not result in revenue loss to the exchequer. However, it is submitted that the provision must be construed strictly, as it curtails the normal self-assessment regime contemplated under Section 59 of the Act.

Textual Analysis of Section 65

Section 65(1) – Notwithstanding anything to the contrary contained in Section 73 or Section 74, where a registered person fails to furnish the return under Section 39 or Section 45, even after service of a notice under Section 46, the proper officer may proceed to assess the tax liability of such person to the best of his judgment taking into account all the relevant material which is available or which he has gathered…

Critical Elements for Valid Assessment:

1. Registered person – Only applies to registered taxpayers

2. Failure to furnish return – Under Section 39 (regular returns) or Section 45 (final return)

3. Service of notice under Section 46 – Mandatory prerequisite

4. Best judgment – Standard of assessment to be applied

5. Relevant material – Must be based on some tangible evidence

Time Limitation – Section 65(3)

The assessment order under Section 65 must be passed within five years from the due date for furnishing the annual return for the financial year to which the tax not paid relates. This is a substantive limitation and not merely procedural. Any assessment order passed beyond this period is liable to be struck down as time-barred.

Practical Tip: Always verify the date of the impugned order against the limitation period. This is often an overlooked but fatal defect in assessment orders.

JURISDICTIONAL PREREQUISITES

1. Prior Service of Notice Under Section 46

Section 46 mandates that where a registered person fails to furnish a return, the proper officer shall serve a notice requiring the person to furnish such return within fifteen days. The assessment under Section 65 can only be initiated if the taxpayer fails to comply with this notice.

Grounds for Challenge: If the revenue cannot establish valid service of Section 46 notice, the entire assessment proceedings become void ab initio for want of jurisdiction.

Leading Case: Collector of Central Excise v. Scindia Steam Navigation Co. Ltd. (1996) 3 SCC 352 – The Supreme Court held that where a statute prescribes the manner in which a particular act is to be done, it must be done in that manner or not at all.

2. Proper Officer

The assessment must be conducted by an officer having jurisdiction over the taxpayer. Any assessment by an officer lacking territorial or pecuniary jurisdiction is liable to be quashed.

3. Show Cause Notice in Form GST ASMT-10

Before finalizing the assessment, the proper officer must issue a show cause notice in Form GST ASMT-10, specifically setting out:

• The grounds on which assessment is proposed
• The amount of tax, interest, and penalty proposed
• The material relied upon

The notice must provide a reasonable opportunity of being heard, which has been consistently interpreted by courts as at least 15-30 days depending on the complexity of the case.

PRINCIPLES OF NATURAL JUSTICE IN SECTION 65 PROCEEDINGS

Audi Alteram Partem

The Supreme Court has consistently held that principles of natural justice are implicit in every statutory provision unless expressly or impliedly excluded. In the context of Section 65, the following must be ensured:

1. Adequate Notice: The show cause notice must clearly indicate the grounds of assessment

2. Reasonable Time: Sufficient time to respond and gather evidence

3. Personal Hearing: Right to personal hearing if requested

4. Consideration of Reply: The assessment order must reflect consideration of submissions

5. Reasoned Order: The order must contain reasons for conclusions reached

Judicial Precedents on Natural Justice

1. Maneka Gandhi v. Union of India (1978) 1 SCC 248 The Supreme Court held that the right to notice and hearing are fundamental aspects of natural justice and cannot be compromised except in exceptional circumstances.

2. Sahara India (Firm) v. Commissioner of Income Tax (2008) 14 SCC 151 The Court held that providing an opportunity of hearing is not a mere formality but must be real and effective.

3. New India Assurance Co. Ltd. v. Nusli Neville Wadia (2008) 3 SCC 279 Reiterated that when a statute requires notice to be given, it must be a proper and adequate notice.

Practice Strategy: In every appeal, examine whether the assessment order specifically addresses the submissions made by the assessee. Courts are increasingly intolerant of “cut-and-paste” orders that do not engage with the taxpayer’s arguments.

BEST JUDGMENT ASSESSMENT: LEGAL STANDARDS

What Constitutes “Best Judgment”?

The term “best judgment” has been subject to extensive judicial interpretation under pre-GST indirect tax laws. The following principles are now well-settled:

1. Not Arbitrary or Fanciful

State of Kerala v. K.T. Shaduli Yusuff (1977) 1 SCC 671 “Best judgment does not mean wild assessment…The assessing authority must act honestly and reasonably and must make a genuine attempt to arrive at a fair and proper assessment.”

Application: Any assessment that is based on arbitrary multiplication of turnover, industry averages without considering actual business circumstances, or unsupported assumptions can be challenged as not constituting “best judgment.”

2. Must Be Based on Material

Commissioner of Income Tax v. Laxminarain Badridas (1937) 5 ITR 170 (PC) The Privy Council held that “best judgment” means the officer must make an honest and fair attempt based on available material.

Application: If the assessment order does not disclose what material was relied upon, it is vulnerable to challenge. The officer cannot make assessments in a vacuum.

3. Application of Mind Required

Commissioner of Customs v. Sayed Ali (2011) 3 SCC 537 Assessment orders must reflect application of mind and cannot be passed mechanically.

Application: Template orders or orders that merely reproduce the show cause notice without independent analysis demonstrate non-application of mind.

4. Reasons Must Be Recorded

Union of India v. Dharmendra Textile Processors (2008) 13 SCC 369 When assessment is made on best judgment basis, the authority must record reasons and the basis for arriving at the assessment figure.

Application: Absence of reasoning or cryptic reasoning renders the order unsustainable.

COMMON GROUNDS FOR CHALLENGING SECTION 65 ASSESSMENTS

As advocates, we must systematically examine assessment orders for the following vulnerabilities:

1. Procedural Defects

a) Invalid Service of Section 46 Notice

• Notice not served at registered email or physical address
• Notice period inadequate
• No proof of service on record

b) Defective Show Cause Notice (Form GST ASMT-10)

• Grounds not specified with clarity
• Lack of details regarding material relied upon
• Insufficient time to respond

c) Non-Consideration of Submissions

• Assessment order passed without considering written submissions
• Personal hearing not granted despite request
• Evidence filed by assessee not examined

2. Substantive Defects

a) Arbitrary Estimation

Revenue authorities often resort to the following arbitrary methods:

• Applying turnover ratios without basis
• Relying on third-party data without verification
• Extrapolating data from dissimilar periods
• Using industry averages for specialized businesses

Advocacy Strategy: Demand disclosure of the basis of estimation. File RTI applications if necessary to obtain the material relied upon. Compare the estimation with industry standards and demonstrate unreasonableness through expert evidence or comparable cases.

b) Denial of Input Tax Credit

Section 65 assessment orders mechanically deny ITC claimed in earlier periods without specific findings. This approach is legally unsustainable.

Key Argument: ITC is a vested right once tax has been paid by the supplier and invoices are available. Denial of ITC requires specific findings of ineligibility under Section 17 or Section 16, not mere non-filing of returns.

Supporting Case Law: Commissioner of Central Excise v. Ind-Swift Laboratories Ltd. (2011) 1 SCC 673 – The Supreme Court held that Cenvat credit is admissible if the assessee has paid duty, regardless of procedural lapses, unless there is fraud or suppression.

c) Excessive Interest and Penalty

Interest Under Section 50: Interest is compensatory, not punitive. Calculation errors in interest computation are common.

Penalty Under Section 73 or 74:

• Section 73 applies to cases without fraud/suppression (penalty up to 10% of tax)
• Section 74 applies to cases with fraud/suppression (penalty up to 100% of tax)

Ground for Challenge: Many assessment orders invoke Section 74 penalties without establishing fraud, willful misstatement, or suppression with intent to evade tax. The burden of proving these elements lies on the revenue.

Leading Case: Dharmendra Textile Processors (supra) – Penalty cannot be automatic; mens rea must be established.

3. Jurisdictional Defects

a) Assessment Beyond Time Limit

Section 65(3) prescribes a five-year limitation. Any order passed beyond this period is void.

b) Wrong Proper Officer

Challenges based on lack of territorial or monetary jurisdiction.

c) Barred by Earlier Proceedings

If the matter has been subject to earlier assessment proceedings under different provisions, the principle of res judicata or double jeopardy may apply.

4. Constitutional Grounds

In appropriate cases, constitutional challenges may be raised:

a) Violation of Article 14: If the assessment is arbitrary or discriminatory

b) Violation of Article 19(1)(g): If the assessment is so excessive as to destroy the right to carry on trade

c) Violation of Article 265: Tax cannot be levied except by authority of law. If the assessment is not in accordance with statutory provisions, it violates this fundamental principle.

LANDMARK JUDICIAL PRECEDENTS

Pre-GST Cases with Continuing Relevance

1. Bharti Airtel Ltd. v. Commissioner of Central Excise, Delhi-III (2008) 10 STT 590 (Tri.-Del.)

Facts: Best judgment assessment under Central Excise without adequate material.

Held: Best judgment assessment must be reasonable and based on material available on record. Arbitrary additions cannot be sustained.

Application: Cite this precedent when challenging assessments based on inadequate or non-existent material.

2. Indian National Shipowners Association v. Union of India (1987) 66 STC 230 (Bom.)

Held: Assessment proceedings must be conducted fairly and in accordance with principles of natural justice. Opportunity of hearing is mandatory before passing adverse orders.

3. State of Orissa v. Titaghur Paper Mills Co. Ltd. AIR 1985 SC 1293

Held: When a statute confers power to assess, it must be exercised judicially and not arbitrarily.

4. Commissioner of Sales Tax v. H.M. Esufali AIR 1973 SC 2660

Held: Best judgment assessment must be based on guess but must have some element of reasonableness. The guess cannot be wild or fanciful.

GST-Specific Cases (Emerging Jurisprudence)

1. Clarus Infrastructure Realty Pvt. Ltd. v. Union of India (Delhi High Court, W.P.(C) 7068/2020)

Issue: Challenge to assessment order for violation of natural justice.

Held: Show cause notice must clearly set out grounds and provide adequate opportunity. Generic notices are insufficient.

2. Radha Krishan Industries v. State of Himachal Pradesh (2021) 130 taxmann.com 112 (SC)

Issue: Pre-deposit requirement under Section 107.

Held: While upholding the constitutional validity of pre-deposit, the Court recognized that financial hardship may be a ground for seeking waiver in exceptional circumstances (though this power is not explicitly granted under GST law).

3. Safari Retreats Pvt. Ltd. v. Principal Commissioner (2021) 49 GSTL 393 (Mad.)

Issue: Validity of assessment when taxpayer had filed returns belatedly before assessment order.

Held: If returns are filed before the assessment order is passed, Section 65 proceedings may become infructuous, and the assessment should be based on filed returns.

Practice Tip: Always advise clients to file pending returns immediately upon receiving Section 46 notice or Section 65 show cause notice. This may render the assessment proceedings nugatory.

ADVISING CLIENTS: IMMEDIATE RESPONSE STRATEGY

Upon Receipt of Section 46 Notice

Step 1: Immediate Compliance

• File all pending returns within the 15-day notice period
• Pay tax with interest if liability exists
• This may prevent Section 65 assessment altogether

Step 2: Documentation

• Gather all invoices, books of accounts, and supporting documents
• Prepare reconciliation statements
• Document reasons for delay in filing returns

Step 3: Response to Notice

• File a detailed reply explaining reasons for non-filing
• Provide undertaking for future compliance
• Request withdrawal of proceedings if returns are now filed

Upon Receipt of Form GST ASMT-10 (Show Cause Notice)

Step 1: Analyse the Notice

• Verify service details and timeline
• Examine grounds stated
• Identify material relied upon by revenue
• Check jurisdictional aspects

Step 2: File Comprehensive Reply

The reply should address:

• Each ground raised in the notice
• Factual matrix of the case
• Computation of actual tax liability with supporting documents
• Reasons for delay in filing returns
• Request for personal hearing
• Legal arguments against proposed assessment

Template Structure for Reply:

To,

The [Designation of Proper Officer]

[Address]

Subject: Reply to Show Cause Notice in Form GST ASMT-10 dated [Date]

Reference No.: [SCN Number]

Sir/Madam,

1. PRELIMINARY OBJECTIONS

1.1 Jurisdictional Issues

1.2 Time Limitation

1.3 Service of Notice Under Section 46

2. FACTUAL MATRIX

2.1 Nature of Business

2.2 Reasons for Non-filing of Returns

2.3 Steps Taken for Compliance

3. DETAILED REPLY ON MERITS

3.1 Actual Tax Liability (with supporting documents)

3.2 Input Tax Credit Admissibility

3.3 Interest Computation

3.4 Non-applicability of Penalty

4. LEGAL SUBMISSIONS

4.1 Principles of Best Judgment Assessment

4.2 Relevant Case Laws

4.3 Statutory Provisions

5. PRAYER

5.1 Request for Personal Hearing

5.2 Drop the proposed assessment

5.3 Alternative: Assess as per actual returns filed

[Date]

[Signature]

Authorized Signatory

Step 3: Request Personal Hearing

Always request personal hearing in writing. Attend the hearing with:

• Written submissions (filed earlier)
• All supporting documents
• Authorized representative letter if advocate is representing
• Note down discussion points and questions raised

Step 4: Post-Hearing Follow-up

After personal hearing:

• File additional submissions if required
• Submit any documents called for by officer
• Request copy of hearing notes if maintained
• Maintain complete record of all submissions

APPEAL UNDER SECTION 107: STRATEGIC CONSIDERATIONS

Understanding Section 107 Framework

Section 107 provides the first appellate remedy before the Appellate Authority (Additional/Joint Commissioner level). The provision is comprehensive and requires careful attention to procedural requirements.

Critical Elements of Section 107 Appeal

1. Appellate Forum

Appeals lie to the Appellate Authority appointed under Section 109. Verify the designated authority for your jurisdiction from the official notification.

2. Time Limit – Section 107(1)

Appeals must be filed within three months from the date of communication of the order. The Appellate Authority may condone delay for a further period of one month if sufficient cause is shown.

Practice Caution: The condonation power is limited to one month. Beyond four months, the appeal becomes time-barred. Courts have held that this is a substantive limitation and cannot be extended by the Appellate Authority.

Computation of Limitation:

• Starts from date of “communication” of order
• Service by email: Date of email delivery
• Service by post: Date of actual receipt (burden of proof on department)
• Service by hand: Date of acknowledgment

Supporting Case: Consolidated Engg. Enterprises v. Principal Secretary, Irrigation Dept. (2008) 7 SCC 169 – Limitation must be strictly complied with in statutory appeals.

3. Pre-deposit Requirement – Section 107(6): THE MOST CRITICAL ASPECT

This is perhaps the most contentious and practically challenging aspect of GST appeals. Section 107(6) mandates:

Formula for Pre-deposit:

Pre-deposit = 10% of disputed tax (max ₹25 crores) + 100% of admitted tax, interest, fine, fee & penalty

Components:

a) 10% of Remaining Disputed Tax:

• “Remaining” means after deducting the amounts already deposited
• Subject to maximum of ₹25 crores per appeal
• Only tax component; not applicable to interest and penalty

b) 100% of Admitted Amounts:

• Any tax admitted by the appellant
• Full interest on disputed and admitted tax
• Full penalty, fine, and fee

Illustration:

Assessment Order Details:

• Total Tax Demanded: ₹1,00,00,000
• Interest: ₹15,00,000
• Penalty: ₹20,00,000
• Total Demand: ₹1,35,00,000

Taxpayer’s Position:

• Tax Admitted: ₹20,00,000
• Tax Disputed: ₹80,00,000

Pre-deposit Calculation:

• 100% of admitted tax: ₹20,00,000
• 10% of disputed tax (80,00,000 × 10%): ₹8,00,000
• 100% of interest (entire amount): ₹15,00,000
• 100% of penalty: ₹20,00,000
• Total Pre-deposit Required: ₹63,00,000

Constitutional Challenges to Pre-deposit

The pre-deposit requirement has been subject to constitutional scrutiny:

Radha Krishan Industries v. State of Himachal Pradesh (2021) 130 taxmann.com 112 (SC)

Contentions Raised:

• Violates Article 14 (arbitrariness)
• Violates Article 19(1)(g) (right to trade)
• Makes appeal illusory for financially distressed taxpayers

Court’s Holding:

• Upheld constitutional validity of mandatory pre-deposit
• Held that it balances revenue protection with taxpayer rights
• Acknowledged financial hardship but found no constitutional infirmity

However, the Court left open the possibility of relief in exceptional circumstances, though no specific mechanism is provided in GST law.

Practical Strategies for Pre-deposit Challenge

Strategy 1: Reduce Disputed Amount

Before filing appeal, critically examine what portion of demand can be admitted:

• Admit amounts that are clearly payable
• This converts them from “disputed” to “admitted” category
• While 100% of admitted amount must be paid, it removes the 10% pre-deposit burden on that portion

Strategy 2: Challenge in Writ Jurisdiction

If pre-deposit creates genuine financial hardship:

• File writ petition under Article 226 before High Court
• Seek interim waiver/reduction of pre-deposit
• Grounds: Financial hardship, prima facie strong case, balance of convenience

Supporting Cases Where Courts Granted Relief:

M/s Meghmani Finechem Ltd. v. State of Gujarat (2022) – Gujarat High Court reduced pre-deposit considering financial hardship and prima facie case.

M/s Eris Lifesciences Ltd. v. Union of India (2023) – High Court waived pre-deposit where demand was based on clear legal error.

Caution: Such relief is discretionary and granted only in exceptional circumstances. Courts generally are reluctant to interfere with statutory pre-deposit requirements.

Strategy 3: Payment in Installments

Some Appellate Authorities may allow pre-deposit in installments. This is not statutorily provided but sometimes accepted administratively. Request in writing at the time of filing appeal.

Form and Manner of Filing Appeal

Form GST APL-01

The appeal must be filed electronically on the GST portal in Form GST APL-01 along with:

Mandatory Annexures:

1. Copy of the impugned order

2. Copy of show cause notice and reply

3. Statement of facts

4. Grounds of appeal

5. Evidence of pre-deposit (challan/payment details)

6. Proof of financial hardship (if seeking any relief)

7. List of case laws relied upon

8. Any additional documentary evidence

Technical Requirements:

• Digital signature of authorized signatory
• Upload size limits (check portal specifications)
• Format: PDF for most documents

Drafting the Appeal: Essential Components

1. Title/Caption

BEFORE THE APPELLATE AUTHORITY

[STATE/CENTRAL TAX]

[CITY/DISTRICT]

Appeal No.: _____________ of 20___

IN THE MATTER OF:

[Name of Appellant]

[GSTIN]

[Address]

… Appellant

VERSUS

The [Designation of Adjudicating Authority]

[Address]

… Respondent

MEMORANDUM OF APPEAL UNDER SECTION 107 OF THE CGST ACT, 2017 AGAINST THE ASSESSMENT ORDER NO. _______ DATED _______ PASSED BY THE [DESIGNATION OF OFFICER]

2. Index

Prepare detailed index of contents and documents filed.

3. Grounds of Appeal

Draft specific, clear grounds. Avoid vague or omnibus grounds.

Model Structure of Grounds:

GROUNDS OF APPEAL

The Appellant craves leave to prefer this Appeal on the following amongst other grounds:

A. PRELIMINARY GROUNDS

1. Violation of Natural Justice

1.1 That the impugned order is passed in gross violation of principles of natural justice as the Appellant was not granted adequate opportunity of hearing despite specific request made vide letter dated _______.

1.2 That the submissions filed by the Appellant dated ______ have not been considered by the Adjudicating Authority, rendering the order unsustainable in law.

2. Jurisdictional Defects

2.1 That the impugned order is barred by limitation as it has been passed beyond the period of five years prescribed under Section 65(3) of the Act.

2.2 That mandatory notice under Section 46 of the Act was not served upon the Appellant, thereby rendering the entire proceedings void ab initio.

B ROUNDS ON MERITS

3. Arbitrary Assessment

3.1 That the assessment is not based on any tangible material and is arbitrary, thereby not constituting “best judgment” as contemplated under Section 65 of the Act.

3.2 That the tax liability has been estimated at ₹_______ without any basis or supporting material, which is wholly unsustainable.

4. Denial of Input Tax Credit

4.1 That the Adjudicating Authority has wrongly denied Input Tax Credit of ₹_______ despite availability of valid tax invoices and payment of tax by the suppliers.

4.2 That ITC cannot be denied merely on ground of non-filing of returns, as the same is a vested right once the conditions under Section 16 are satisfied.

5. Interest and Penalty

5.1 That interest has been wrongly computed/calculated.

5.2 That penalty under Section 74 has been levied without establishing fraud, willful misstatement or suppression of facts.

C. LEGAL GROUNDS

6. That the impugned order is contrary to the following decisions:

[List relevant case laws]

7. That the impugned order is bad in law and liable to be set aside.

8. That the Appellant reserves the right to add, alter, amend or modify the grounds of appeal at the time of hearing.

4. Statement of Facts

Provide chronological narrative of facts:

• Nature of business
• Period of default
• Notices received and responses filed
• Personal hearings attended
• Assessment proceedings
• Order passed
• Present appeal filed

5. Detailed Arguments

Elaborate on each ground with:

• Factual contentions
• Legal provisions
• Case law analysis
• Documentary evidence references

6. Relief/Prayer

PRAYER

In light of the above submissions, it is most respectfully prayed that this Hon’ble Appellate Authority may be pleased to:

a) Admit the present Appeal;

b) Set aside the impugned Assessment Order dated _______;

c) Alternatively, remand the matter to the Adjudicating Authority for fresh consideration;

d) Grant any other relief deemed fit in the facts and circumstances of the case;

e) Award costs of the appeal.

AND FOR THIS ACT OF KINDNESS, THE APPELLANT SHALL DUTY BOUND FOREVER PRAY.

Place: _________                            Counsel for the Appellant

Date: _________

7. Verification

Proper verification by authorized signatory is mandatory.

8. List of Documents

Prepare comprehensive list of all documents relied upon.

Powers of the Appellate Authority – Section 107(12)

The Appellate Authority has wide powers:

1. Confirm the order – Uphold the assessment

2. Modify the order – Reduce or increase demand

3. Annul the order – Set aside completely

4. Remand – Send back for fresh consideration

5. Pass any other order – Any order deemed fit

Time Limit for Decision: The Appellate Authority should pass an order within one year from the date of filing of appeal. However, this is directory, not mandatory.

Post-Appeal Strategies

If Appeal is Allowed:

• Obtain refund of pre-deposit with interest
• Ensure proper updation in GST portal
• Monitor compliance by department

If Appeal is Dismissed or Partly Allowed:

• Evaluate grounds for second appeal under Section 112 (GST Appellate Tribunal)
• Consider writ petition if jurisdictional/legal errors apparent
• Assess financial impact and commercial viability of further litigation

Recovery During Appeal Pendency:

Upon filing appeal and making pre-deposit, recovery of balance disputed amount is stayed during pendency of appeal. However, ensure:

• Proper acknowledgment of appeal filing
• Confirmation of pre-deposit
• Communication to assessing officer about stay of recovery

ALTERNATIVE REMEDIES

1. Second Appeal to GST Appellate Tribunal – Section 112

Against: Order of Appellate Authority under Section 107

Forum: GST Appellate Tribunal (State Bench or Area Benches)

Time Limit: 3 months from communication of order (additional 1 month condonable)

Pre-deposit: 20% of disputed tax, maximum ₹50 crores, plus 100% of admitted amounts

Note: As of the current date, the GST Appellate Tribunal is not yet fully functional in all states. In the interim, some High Courts have been entertaining writ petitions.

2. Writ Petition Under Article 226

A writ petition before the High Court may be filed in the following circumstances:

Maintainability Grounds:

• Jurisdictional error apparent on the face of record
• Violation of constitutional rights (Articles 14, 19, 21, 265)
• Order passed without authority of law
• Violation of principles of natural justice
• Assessment order passed beyond statutory time limit
• Where no alternative efficacious remedy exists

Recent Trend: High Courts have been accepting jurisdiction in GST matters, especially where:

• Tribunal not yet constituted
• Prima facie case of legal error
• Financial hardship due to pre-deposit

Leading Cases on Writ Jurisdiction in GST:

SABIC Innovative Plastics India (P) Ltd. v. Commissioner of Central Excise & Customs (2012) 9 SCC 447 – Writ jurisdiction can be exercised when there is violation of principles of natural justice or jurisdictional error.

3. Rectification Application – Section 161

If there is any mistake apparent from the record in the assessment order or appellate order:

• File application under Section 161
• Time limit: 3 months from date of order
• Can be filed by proper officer or taxpayer
• Covers clerical, arithmetical or other errors

Scope: Limited to mistakes apparent on face of record; cannot be used for re-hearing.

4. Revision Under Section 108

The revisional jurisdiction lies with:

• Commissioner (for orders passed by officers subordinate to him)
• Can be invoked suo motu or on application
• Within 3 years from date of order

Practical Limitation: Rarely invoked; largely departmental remedy.

ETHICAL AND PROFESSIONAL CONSIDERATIONS

Duties as Advocates

Under the Bar Council of India Rules:

1. Duty to Client: Provide competent and diligent representation

2. Duty to Court: Not mislead the tribunal with false facts or law

3. Duty to Opponent: Professional courtesy while being zealous advocate

4. Duty to Profession: Uphold dignity and integrity

Specific Considerations in Tax Practice

1. Client Counselling

Provide realistic assessment of:

• Merits of the case
• Prospects of success
• Financial implications (pre-deposit, costs)
• Time involved in litigation
• Alternative dispute resolution options

2. Document Verification

Thoroughly verify all documents and facts before filing. Do not rely blindly on client-provided information.

3. Disclosure Obligations

If adverse facts or judgments exist, disclose them to the tribunal. This enhances credibility.

4. Settlement Options

Explore possibility of settlement or compromise where appropriate, especially if:

• Client has weak case on merits
• Financial burden of litigation is disproportionate
• Business relationship considerations

PRACTICAL CHECKLISTS FOR ADVOCATES

Checklist 1: Upon Receiving Section 65 Assessment Order

• Verify date of order and limitation for appeal
• Check service details and effective date of communication
• Examine jurisdictional aspects (proper officer, territorial jurisdiction)
• Verify time-barring under Section 65(3)
• Check if mandatory notice under Section 46 was served
• Examine if show cause notice in Form ASMT-10 was issued
• Review whether personal hearing was granted if requested
• Analyze basis of assessment (material relied upon)
• Verify computation of tax, interest, penalty
• Check if order is reasoned and addresses submissions
• Identify grounds for appeal
• Calculate pre-deposit requirement
• Advise client on merits and financial implications
• Prepare timeline for filing appeal

Checklist 2: Before Filing Appeal Under Section 107

• Confirm limitation period not expired
• Prepare Form GST APL-01
• Draft detailed grounds of appeal
• Prepare statement of facts
• Collect all supporting documents
• Obtain copies of:
  • Assessment order
  • Show cause notice and reply
  • All correspondence
  • Personal hearing records
• Calculate exact pre-deposit amount
• Arrange funds for pre-deposit
• Make pre-deposit payment
• Obtain payment proof/challan
• Compile case law citations
• Prepare index and pagination
• Obtain authorization from client
• Digital signature arrangement
• Upload appeal on GST portal
• Verify successful filing and obtain acknowledgment
• File physical copies if required
• Maintain complete record

Checklist 3: Appeal Hearing Preparation

• Receive hearing notice from Appellate Authority
• Note hearing date and time
• Review entire case file
• Prepare oral arguments
• Update case law research
• Prepare charts/tables if needed for complex facts
• Brief junior counsel/CA if accompanying
• Carry complete set of documents
• Prepare written synopsis/notes for arguments
• Anticipate counter-arguments from department
• Check status on portal before hearing
• Reach venue in advance
• Take notes during hearing
• Request adjournment if needed with valid reasons
• File additional submissions if time granted