Best Judgment Order Set Aside and Remanded as Belated Return Reflected Higher Tax Payment
Issue
Whether a best judgment assessment order passed under Section 62 for non-filing of GSTR-3B should be set aside and remanded when the assessee subsequently files a belated return declaring and paying tax in excess of the assessed amount.
Facts
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Default in Return Filing: The assessee, a registered person under GST whose registration stood cancelled, failed to file the GSTR-3B return for the period June 2022.
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Best Judgment Assessment Passed: Consequently, the Assessing Officer issued a best judgment assessment order under Section 62 determining the tax liability for June 2022.
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Lack of Knowledge Claimed: The assessee asserted ignorance of the best judgment assessment order due to the cancellation of registration.
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Belated Return Submitted: The assessee subsequently filed the delayed GSTR-3B return for June 2022, which reflected a tax payment higher than the amount assessed in the best judgment order.
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Writ Petition Filed: The assessee filed a writ petition challenging the best judgment assessment order and seeking judicial interference.
Decision
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Reconsideration Required: The court observed that the belatedly filed statutory return for June 2022 disclosed a higher tax payment than the amount determined under the best judgment order.
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Interest of Justice: Since the excess tax stood disclosed and paid via the statutory return, the court held that a fresh consideration was necessary in the interest of justice.
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Order Set Aside and Remanded: The court set aside the impugned best judgment assessment order and remanded the matter back to the Assessing Officer to issue a fresh decision after providing a reasonable opportunity of being heard within three months.
Key Takeaways
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Primacy of Actual Tax Liability: Where a belated return reflects actual tax liability and payment exceeding a summary best judgment estimate, courts favor remanding the matter for proper reconciliation rather than enforcing a lower or inaccurate assessment.
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Remand for Reconsideration: Failure to comply with timeframes for withdrawing a Section 62 order does not preclude writ courts from setting aside best judgment orders if the taxpayer demonstrates full compliance and payment through statutory returns.
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Time-Bound Adjudication: On remand, assessing authorities are required to re-evaluate the filed return and pass a fresh order within a court-mandated timeframe after affording the taxpayer a fair hearing.
HIGH COURT OF MADRAS
Narasus Diary
v.
Deputy State Tax Officer II
Senthilkumar Ramamoorthy, J.
WP No. 21857 of 2026
W.M.P. Nos. 23696 & 23699 of 2026
W.M.P. Nos. 23696 & 23699 of 2026
JULY 2, 2026
Ms. Aparna Nandakumar for the Petitioner. R. Sethu Prabakaran, Government Counsel (Tax) for the Respondent.
ORDER
1. An order under Section 62 of applicable GST enactments is challenged in this writ petition.
2. Learned counsel for the petitioner submits that the GST registration of the petitioner was cancelled on 15.03.2023 and, therefore, the petitioner was unable to approach this Court earlier on account of not being aware of the order. She points out that said order was issued on account of non filing of GSTR 3B return for the month of June 2022. She also submits that said return was filed with a delay and that the tax paid therein is higher than the tax determined under the impugned order.
3. Mr.R.Sethu Prabakaran, learned Government Counsel (Tax), accepts notice for the respondent. He points out that the order was issued on 20.10.2022.
4. The GSTR 3B return of the petitioner for June 2022 reflects that the amount paid by the petitioner for June 2022 exceeds the amounts determined under Section 62. In these circumstances, re-consideration is necessary in the interest of justice. To facilitate such re-consideration, the impugned order is set aside and the matter is remanded to the assessing officer. After providing a reasonable opportunity to the petitioner, a fresh order shall be issued within three months from the date of receipt of a copy of this order.
5. The writ petition is disposed of on the above terms. Consequently, connected writ miscellaneous petitions are closed. There shall be no order as to costs.