Best Judgment Assessment Orders Quashed as Revenue Failed to Prove Service of Mandatory Statutory Notices

By | August 13, 2026
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Best Judgment Assessment Orders Quashed as Revenue Failed to Prove Service of Mandatory Statutory Notices

Best Judgment Assessment Orders Quashed as Revenue Failed to Prove Service of Mandatory Statutory Notices

Issue

Whether best judgment assessment orders passed under Section 62 of the CGST/KGST Act are legally sustainable when no mandatory statutory notices were actually served on the petitioner before passing the assessment orders.

Facts

  • The petitioner was originally registered under the Kerala Value Added Tax (KVAT) Act and migrated to the GST regime upon its implementation.
  • In September 2017, the petitioner stopped business operations. Although the petitioner intended to cancel its GST registration, a proviso to Rule 20 prohibited cancellation within one year of obtaining registration.
  • In November 2017, the petitioner leased out the business premises to another entity, which subsequently obtained GST registration at the same address.
  • The petitioner faced a series of best judgment assessment orders passed under Section 62 for the period February 2018 to February 2019 due to non-filing of returns following notices.
  • The petitioner checked its GST portal dashboard and found no reference or upload of any show-cause or statutory notices, discovering only the details of summary assessment orders.
  • The petitioner filed a writ petition challenging the validity of the assessment orders on the ground of non-service of mandatory notices.

Decision

  • Non-Service of Notices Proved [In favour of assessee]: The High Court held that there was no material on record to demonstrate that statutory notices were served on the petitioner prior to passing the assessment orders.
  • Recital in Order Insufficient: The Court held that mere reference or recitals of notices within the assessment orders cannot serve as proof that notices were actually served on the taxpayer.
  • Assessment Orders Quashed [Matter remanded]: The series of best judgment assessment orders was set aside, and the matter was remanded to the Assessing Officer to reconsider the case after issuing fresh statutory notices in accordance with Section 169.

Key Takeaways

  • Proof of Service Is Mandatory: Before passing a best judgment assessment under Section 62, the Revenue must strictly prove service of notice under Section 169; unverified references inside an assessment order do not establish valid service.
  • Dashboard Upload Requirement: Notices must be properly served or communicated through prescribed statutory modes (including portal uploads); failure to do so violates the principles of natural justice and renders consequential assessment orders void.
  • Remand for De Novo Proceedings: Setting aside an assessment order due to procedural defects like non-service of notice allows the tax authority to re-initiate proceedings by issuing fresh statutory notices.
HIGH COURT OF KERALA
Mundeth Ply Boards
v.
State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 18982 OF 2024
MAY  20, 2026
Hrithwik D. Namboothiri and P.N. Damodaran Namboodiri, Advs. for the Petitioner. Arun Ajay Shankar, GP and C. Dinesh, CGC for the Respondent.
JUDGMENT
1. The petitioner was a registered taxable person under the provisions of the CGST/KSGST Act, 2017. The petitioner was was originally registered under the provisions of the KVAT Act and migrated to the CGST/KSGST Act, upon its implementation since 01.07.2017.
2. During the month of September, 2017 the petitioner stopped the business. According to the petitioner, even though the petitioner wanted to cancel the registration on such stoppage, he could not do so, in view of the fact that, as per the proviso to Rule 20 of the CGST Rules, as it then existed, there was a prohibition on cancelling the registration, for a period of one year from the date of obtaining the registration.
3. During the month of November, 2017 the petitioner leased out the said premises to another person as evidenced by Ext.P5. The said person have taken registration under the provisions of the CGST Act in the same premises and was being regularly furnishing the returns and paying the tax for the business that is carried out in the said building. The grievances of the petitioner in this writ petition is against Ext.P2 series of orders of assessment under Section 62 of the CGST Act, where, the petitioner was subjected to best judge assessment, as the petitioner failed to submit the returns despite of issuance of notices. The challenge against Ext.P2 series is on the ground that the statutory notice as contemplated under Section 62 was not issued to the petitioner, thereby, the petitioner was deprived of the opportunity to furnish the returns within 15 days from the receipt of such notice.
4. To substantiate the contention that the petitioner was not served with the statutory notices before issuance of Ext.P2 series of assessment orders, the petitioner is relying on Ext.P4 screen shot of the dash board of the petitioner maintained by the Department of GST. According to the petitioner, in Ext.P4, there is no reference of any notice and it contains only the details of the summary order issued. It is therefore, contended that, an interference is required in Ext.P2 series orders of assessment.
5. A counter affidavit has been submitted on behalf of the respondents opposing the averments of the petitioners and also opposing the reliefs sought by the petitioner. It was contended that, even though there was a prohibition for cancelling the registration at the relevant time, the petitioner ought to have filed the returns. It was further contended that the prohibition was only for a period of one year and, therefore, after the expiry of the said period, the petitioner ought to have taken steps either to cancel the registration or to file the returns. It was pointed out that, in this case, Ext.P2 series orders of assessments were passed pertaining to the months of February, 2018 to February 2019, which were after the expiry of the one year period from the date of registration. It is also pointed out that the petitioner’s registration is already cancelled suo motu for non-filing of the return as well.
6. I have heard Sri.Hrithwik D.Namboothiri, the learned counsel appearing for the petitioner and Sri.Arun Ajay Shankar, the learned Government Pleader for the respondents.
7. The specific contention raised by the learned counsel for the petitioner are that, no notice as contemplated under Section 62 of the Act, 2017 was issued, before passing Ext.P2 series assessment orders under Section 62. Of course, it is true that in the respective orders of assessment, there are reference of the notices issued. However, as rightly pointed out by the learned counsel for the petitioner, in Ext.P4, the screenshot of the dashboard of the petitioner, there is no indication as to the issuance of the said notices to the petitioner. While filing the counter affidavit by the 1st respondent also, no documents are produced to substantiate that the notices were indeed issued to the petitioner before passing the assessment orders under Section 62 as evidenced by Ext.P2 series. There cannot be any dispute that, the assessment orders under Section 62 without issuing a notice can only be treated as null and void. In this case, as there is nothing to show that notices were served upon the petitioner, I am of the view that Ext.P2 series orders cannot be treated as valid. The mere reference of notices in the assessment orders by itself cannot be reason to assume that notices were issued to the petitioner. The requirement is to serve such notices upon the petitioner through any of the modes contemplated under Section 169 of the CGST Act, 2017 and in the absence of any such evidence before this Court, the only conclusion possible is that, the impugned orders were passed without fulfilling the aforesaid mandatory requirements.
8. In such circumstances, I am of the view that an interference is required. While taking this view, this Court also considered the fact that, another entity has already secured a registration in respect of the very same premises and returns are being submitted regularly for the period including the period covered by Ext.P6 orders of assessment as well.
In such circumstances, this writ petition is disposed of quashing Ext.P2 series orders of assessment pertaining to the period from February, 2018 to February, 2019, with a direction to the competent Assessing Officer to reconsider the matter, after issuing a fresh statutory notice as contemplated under Section 62, if warranted. Since it is pointed out that the registration of the petitioner has already been cancelled since 2019 as evidenced by Ext.P1 and that no access is available to the petitioner to the portal, the petitioner shall appear before the Assessing Officer concerned, on 18.06.2026, for further processing of the matter.