Andhra Pradesh High Court Quashes GST Assessment Orders Against Indubaala Enterprises LLP

Court Rules Assessment Orders Deemed Withdrawn Upon Late Filing of GSTR-3B with Late Fee Payment

In a significant ruling, the Andhra Pradesh High Court has quashed the GST assessment orders against Indubaala Enterprises LLP, deeming them withdrawn after the petitioner filed the necessary GSTR-3B returns along with the payment of late fees. This decision came as a relief to the petitioner, who faced recovery proceedings initiated under the Goods and Services Tax (GST) Act, 2017.

The case involved three writ petitions filed by Indubaala Enterprises LLP, challenging the assessment orders issued under Section 62 of the GST Act for the periods of April, May, and June 2024. The assessment orders were passed due to the petitioner’s failure to file returns for these periods. Subsequently, recovery proceedings were initiated to collect the assessed amounts, including interest and penalties.

The petitioner, represented by counsel Anil Kumar Bezawada, argued that the assessment orders should be considered withdrawn once the requisite GSTR-3B returns were filed, even if done beyond the prescribed period, provided the late fee was paid. The court, comprising Justices R Raghunandan Rao and T.C.D. Sekhar, agreed with the petitioner’s contention, referencing a similar judgment from a Division Bench of the same court in the case of Brothers Engineering and Errectors Ltd., which followed a precedent set by the Madras High Court.

In its ruling, the court emphasized that the assessment orders, dated July 12 and August 17, 2024, were effectively nullified by the subsequent filing of returns and payment of late fees. Consequently, the court ordered that no further recovery actions could be pursued based on these orders.

This judgment underscores the importance of adhering to procedural allowances within the GST framework, particularly regarding the late filing of returns and associated penalties. It also highlights the judiciary’s role in ensuring fair application of tax laws, providing taxpayers with a mechanism to rectify procedural lapses without facing undue penalties.

The decision has been welcomed by tax practitioners, as it provides clarity on the consequences of late return filings and the deemed withdrawal of assessment orders under Section 62 of the GST Act. It serves as a reminder to taxpayers to utilize available avenues for compliance to avoid enforcement actions.

Bottom Line:

Assessment orders under Section 62 of the GST Act are deemed to have been withdrawn once GSTR-3B returns are filed, either within the prescribed time or beyond it, along with the payment of late fee.

Statutory provision(s): Goods and Services Tax (GST) Act, 2017, Section 62

Indubaala Enterprises LLP v. Deputy Commissioner, Special Circle, Eluru Division, (Andhra Pradesh)(DB) : Law Finder Doc Id # 2819322