SUMMARY ASSESSMENT IN GOODS AND SERVICES TAX

Summary Assessment in GST Special Cases (Section 64)

Section 64 of CGST Act, 2017 provides for summary assessment in certain specified cases or circumstances, i.e.:

1. There being an evidence of tax liability of a person coming to notice of proper officer.
2. To protect the interest of revenue
3. Deeming person in charge of goods to be taxable person where taxable person to whom tax liability pertains is not ascertainable.

It may be noted that summary assessment under section 64 is a fast track assessment in the interest of revenue whereby the proper officer directly issues the assessment order after taking the permission of designated Additional Commissioner or Joint Commissioner, as the case may be.

Summary assessment means determination of tax liability by proper officer on the basis of returns of taxable person and on any evidence in the possession of proper officer without calling the taxable person for his explanation/ clarifications.

Summary Assessment involves:

• Fast track assessment in interest of revenue – Will directly issue the order after permission of Additional / Joint Commissioner.
• On representation of person assessed, assessment order can be withdrawn and proceedings under Section 73 or 74 or 74A can be initiated

The Proper Officers under the provision of section 64 of the CGST Act, 2017, have the power to make summary assessment in following cases:

     (a)   He has evidence in his possession that the person has incurred or likely to incur tax liability under this Act.

     (b)   He has sufficient grounds to believe that any delay in assessment will adversely affect the interest of revenue.

     (c)   The assessment of tax liability is required to protect the interest of revenue.

    (d)   He takes the previous approval of Joint/Additional Commissioner for summary assessment

     (e)   He makes the determination of the tax liability on the basis of material in his possession by way of issuance of an assessment order on taxable person.

For the purpose of summary assessment, following points are important:

1. It is mandatory for proper officer to obtain prior permission for initiating summary assessment under section 64 of CGST Act, 2017
2. Proper officer cannot initiate the proceedings suo moto on his own
3. Summary assessment must be based on evidence
4. Summary assessment cannot be initiated on the basis of opinion of proper officer as an opinion is not an evidence.
5. Summary assessment can be initiated against any taxable person.
6. Summary assessment can be initiated irrespective of the fact whether taxable person has filed the return or not.

Summary assessment under section 64 of the CGST Act, 2017, can therefore, be construed in some sense as a ‘protective assessment’ carried out in circumstances, where there are grounds to believe that taxable person will fail to make payment of any tax, penalty or interest, if the assessment is not completed immediately.

According to section 64(1) of the CGST Act, 2017, provides that the proper officer needs to make a case for summary assessment on the basis of any evidence in his possession in respect of tax liability of a person. On such he is required to seek previous approval of Additional/Joint Commissioner for doing summary assessment. Thus, summary assessment can not be taken up by proper officer without seeking previous approval of Additional/Joint Commissioner.

Deeming effect

In cases the person who is supposed to be liable is not ascertainable, the provisions in this respect have been provided in section 64 of the CGST Act, 2017 as under:

In case the person to whom the liability pertains is not ascertainable and the tax liability pertains to supply of goods, in such cases, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and pay tax.

It may be noted that there is no deeming provision when unpaid tax liability relates to supply of services.

Circumstances for withdrawal of summary assessment

As provided in section 64(2) of the CGST Act, 2017, a summary assessment order served by the proper officer under section 64(1) of the CGST Act, 2017, can be withdrawn in following cases:

     (a)   On an application by taxable person to be made by him within 30 days of receipt of order on him.

     (b)   By Joint/Additional Commissioner suo-moto in case they consider that on facts and circumstances of the case, such summary order is erroneous.

When a summary assessment order served by proper officer is withdrawn either on the application of taxable person or suo-moto by Joint/Additional Commissioner, as the case may be, the proper officer may start the proceedings for determination of tax under section 73 or section 74 or section 74A, i.e., determination of tax not paid or short paid or erroneously refunded, of the CGST Act, 2017, as the case may be.

It may be noted that every assessment order so withdrawn under sub-section (2), must be followed by a notice under section 73 or section 74 or section 74A of the CGST Act, 2017.

Validity of service of notice etc.

According to sub-section (2), any notice, order or communication cannot be called in question if action has already been taken upon by the person to whom it is issued. This will also apply in the cases where it was not called in question in the past in earlier proceedings or earlier proceedings have been finalized.

Applicable Rules and Forms

Applicable Rule

According to Rule 100 of CGST Rules, 2017, the sub-rule (3), (4) and (5) provides as follows:

(3) The order of assessment under sub-section (1) of section 64 shall be issued in FORM GST ASMT-16 and a summary of the order shall be uploaded electronically in FORM GST DRC-07.

(4) The person referred to in sub-section (2) of section 64 may file an application for withdrawal of the assessment order in FORM GST ASMT-17.

(5) The order of withdrawal or, as the case may be, rejection of the application under sub-section (2) of section 64 shall be issued in FORM GST ASMT-18.

Applicable Forms

Accordingly, following forms are required to be used for various purposes and are to be filed online:

Judicial Pronouncements under GST

In M/s Shailendra Eat Udyog Versus State of U.P. And 3 Others - 2019 (10) TMI 1010 - ALLAHABAD HIGH COURT, the writ petition had been filed against the order dated 10.06.2018 passed by the Assistant Commissioner Commercial Tax, Mathura, by which the assessee had been assessed to tax for the month January, 2018. Against that order, the assessee had filed first appeal that came to be dismissed as beyond time.

The court observed that it may not have been necessary that the assessing officer may himself have had the occasion to examine the admissibility or otherwise of the assessee to the compounding scheme inasmuch as under the Act, it is the proper officer who had to examine the admissibility of compounding application (that is admitted to have been filed by the assessee).

Accordingly, the Order dated 10.06.2018 suffers from an inherent defect, in as much as it appears to have been passed without first verifying whether any satisfaction had been reached by the proper officer as to the admissibility of the assessee to the benefit of the compounding scheme pursuant to his application which admittedly had been filed within time alongwith necessary deposit of compounding fee. The order dated 10.06.2018 was accordingly set aside and the matter remitted to the assessing authority to pass a fresh order of assessment in accordance with law. The aforesaid exercise was directed be completed as expeditiously as possible, preferably within a period of six months from the date of production of a certified copy of the order. It is made clear that before proceeding to make any order of assessment, it would be incumbent on the assessing officer to first verify himself the fate of the compounding application admittedly filed by the assessee for the month January, 2018.