The Andhra Pradesh High Court has held that assessment orders passed under Section 62 of the CGST Act cannot be enforced if the taxpayer subsequently files the pending returns along with payment of the applicable tax, interest, and other statutory dues. 

The bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar directed the tax authorities to verify whether such payments had been made and, if confirmed, refrain from recovering any amount under the earlier assessment orders.

Two writ petitions were filed challenging best judgment assessment orders issued by the State Tax Department under Section 62 of the CGST/APGST Acts.

The petitioner, a registered GST taxpayer, had delayed filing GST returns for the months of April 2023 and May 2023. Owing to the non-filing of returns, the Assistant Commissioner of State Tax passed separate best judgment assessment orders on 13 July 2023 under Section 62 of the GST Act.

Subsequently, the taxpayer filed the pending returns along with payment of tax. The return for April 2023 was filed on 19 September 2023, while the return for May 2023 was filed on 20 September 2023. According to the petitioner, the tax liabilities, interest, and other applicable dues had also been discharged.

Despite the filing of returns, the State Tax authorities allegedly initiated recovery proceedings based on the earlier assessment orders, prompting the taxpayer to approach the High Court.

The petitioner argued that once the pending returns were furnished along with payment of the applicable tax and interest within the statutory framework, the assessment orders passed under Section 62 automatically stood withdrawn by operation of law. Consequently, any attempt to recover tax under those assessment orders was without legal authority.

The Government Pleader did not dispute that the petitioner had filed the returns along with payment of tax and interest. However, the State submitted that it had not yet received complete instructions regarding whether the entire tax and other statutory dues had actually been paid.

After considering the submissions, the Division Bench directed the tax department to verify whether the petitioner had indeed paid the tax and all other amounts due while filing the delayed returns.

The Court clarified that if the verification establishes that the tax, interest, and other statutory dues have been fully paid, the assessment orders dated 13 July 2023 shall be treated as withdrawn, and the department shall not proceed with any recovery based on those orders. However, if the verification reveals that the statutory dues remain unpaid, the authorities would be free to continue recovery proceedings under the assessment orders in accordance with law.

The Andhra Pradesh High Court disposed of both writ petitions by directing the Assistant Commissioner of State Tax to verify the payment of tax and other statutory dues. Upon confirmation of such payment, the assessment orders would be deemed withdrawn, and no recovery could be made under those orders. If the dues were found to be unpaid, the department would be entitled to proceed with recovery in accordance with law. No order as to costs was passed.

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