GST Assessment Upheld: Taxpayer Loses Challenge After Failing to File GSTR-3B Return Despite Statutory Notice

HC dismissed a GST assessment challenge where taxpayer failed to file GSTR-3B return after receiving statutory notice. The court upheld the best judgment assessment under Section 62 of CGST Act, finding no procedural irregularities. Despite petitioner's claims of excessive assessment, the court determined the assessment was valid and followed prescribed legal procedures, rejecting intervention.

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Issues:
The issues involved in the judgment are the validity of the best judgment assessment made under Section 62 of the Central Goods & Services Tax Act, 2017, the failure of the petitioner to file the requisite return, and the alleged excessive assessment amount.

Validity of Assessment under Section 62:
The petitioner challenged the assessment made under Section 62 of the Act, 2017, which is a best judgment assessment. The petitioner failed to file the required return despite receiving a notice under Section 46 of the Act, leading to the impugned assessment. The Court noted that the assessment amount, although disputed by the petitioner, was based on the petitioner's own submission of liability. The Court found that the assessment being higher than the average monthly tax paid by the petitioner in previous months was not sufficient reason for interference.

Failure to File Requisite Return:
The petitioner, due to financial crisis and non-availability of funds, did not file the GSTR-3B for March 2023 within the prescribed time limit. Despite a notice under Section 46 of the Act, 2017 requiring a response and filing of the return within 15 days, the petitioner did not comply. Consequently, the respondents conducted a best judgment assessment under Section 62, creating a liability of Rs. 51,98,302/-.

Alleged Excessive Assessment Amount:
The petitioner contended that the assessment was unjustified as no opportunity of hearing was provided as required under Section 75(4) of the Act, 2017. The petitioner argued that the demand was frivolous and not in line with departmental guidelines. However, the Court held that the prescribed procedure under Section 62 had been followed diligently by the respondents, including issuing a notice under Section 46, which the petitioner failed to respond to or appear for.

Precedents and Submissions:
Both parties relied on precedents - the petitioner cited Golden Mesh Industries case from Telangana High Court, while the respondents referred to Kachwala Gems case from the Supreme Court. The respondents emphasized that the impugned order was appealable under Section 107 of the Act, 2017, and urged the Court to dismiss the petition for not availing the alternative remedy.

Conclusion:
After considering the arguments and material on record, the Court found no grounds to interfere with the best judgment assessment order. The Court dismissed the petition, stating that the petitioner's dissatisfaction with the assessment amount alone was not sufficient for judicial intervention. However, the Court clarified that any observations made in the judgment would not hinder the petitioner from filing a statutory appeal.

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