Assessments Under GST

Section-62 Assessment of non-filers of returns

Introduction.

-As per Section-62 provisions, proper officer can proceed to assess the tax liability of the said person to the best of his judgment, if taxpayer fails to file returns as per section 39 & as per section 45,

-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.

Section 39- Relates to GSTR3B

Section 44- Relates to Annual Return (GSTR-9)

Section 45- Relates to Final Return (GSTR-10) to be filed on

cancellation of registration

Section 62 cannot be invoked for non-filing of GSTR-1, GSTR-2 and GSTR-9.

Essential Ingredient :-

Issuance of notice under section 46, is inescapable and compulsory for any action under section 62 to be taken up

Other Important Points.

Whenever the provisions of section 73 or 74 applies, the provisions of section 62 of the Act cannot be invoked.

Section 73 relates to- Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful – misstatement or suppression of facts.

Section 74 relates to- Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful-misstatement or suppression of facts.

Process of Assessment

♦ The order of assessment made under section 62 shall be issued in FORM GST ASMT-13 and a summary thereof shall be uploaded electronically in FORM GST DRC-07.

♦ Since DRC-07 will also be issued, best judgment assessment under section 62 proceeds on the understanding that the demand made in order in ASMT13 will lead to recovery of tax assessed.

♦ It is for this reason that if a valid return is not filed within 30 days to vacate this order, to set aside this demand will be to file appeal under section 107 is the only remedy.

Relevance of Best Judgment

  • If the assessee fails to furnish the return within 15 days of issue of notice under section 46 then the Proper Officer may assess the tax liability in to the best of his judgment, taking into account all the relevant material available on record, and issue an assessment order. This is also known as ‘best judgment assessment’.
  • It can be completed without giving notice of hearing to the assessee.
  • Another important aspect is, in case an order of best judgment is passed under section 62 and returns are not filed within 30 days, the order becomes final and even if returns are filed subsequently, the order CANNOT be withdrawn.
  • Only remedy will be to file such returns and also  prefer appeal under section 107.

Author Bio

Qualification: CA in Practice
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Location: DELHI, Delhi, India
Member Since: 01 Jan 2020 | Total Posts: 5
Author is a Chartered Accountant by qualification having past experience of working with Big 4 Audit firm currently practicing in Delhi as a Partner in SASG & Co. He is a Commerce Graduate from Delhi University Also have completed Cerification in Goods & Service Tax from ICAI, Certificatio View Full Profile

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2 Comments

  1. Lalith says:

    Sir, i a have a doubt, for example i have filed GSTR-3 B return for the month of October, 202 as NIL but i have liability and i dont have ITC. Now the department asked me to pay the liabiity through cash only. But i have received ITC during the current month (February, 21), can i pay the same through ITC.
    If i need to pay through cash only then under what section / rule, department is asking me to pay in cash. Pl explain. Urgent please

  2. Om Prakash Jain says:

    To supplement the above conclusions it has recently been held in Hash Constructions v. The Deputy Commissioner (Ker)(2021) 35 J.K.Jain’s GST & VR 208 that “Due to non filing of returns within 30 days from the receipt of the Best judgment assessment order in ASMT-13, a “Summary of Demand Order” was issued in DRC-07. Since the appeals were filed after a delay of more than four months of the Assessment Order & no challenge was made to DRC-07, the appeals were rejected due to uncondonable delay.”
    The High court has written in the judgment that in the appeals filed after a delay of more than four months & no challenge was made to DRC-07. My question in this regard is that in case someone challenges DRC-07 after four months, whether the delay in filing the appeal becomes condonable.
    Om Prakash Jain 9414300730

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