GST assessment orders lose force once returns are filed with late fee; recovery proceedings cannot continue

Assessment orders made under Section 62 of the GST Act for non-filing of returns were treated as withdrawn once the assessee later filed the prescribed GSTR-3B returns with payment of late fee. On that basis, recovery proceedings founded on those assessment orders could not survive and could not be initiated or continued. The writ petitions succeeded in effect because the assessments lost their force after the returns were filed, consistent with the view that subsequent compliance operates to withdraw the earlier assessment by law.

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Issues: Whether assessment orders passed under Section 62 of the GST Act stood deemed to have been withdrawn upon filing of the returns with payment of late fee, and whether recovery proceedings could continue on the basis of such orders.

Analysis: The petitioner filed the prescribed GSTR-3B returns after the assessment orders, along with payment of late fee. The Court followed the earlier view that once the returns are filed, even beyond the prescribed period with late fee, assessment orders passed for non-filing of returns are treated as withdrawn by operation of law. On that basis, the recovery action initiated on the strength of those assessment orders could not survive.

Conclusion: The assessment orders were deemed to have been withdrawn, and the recovery proceedings could not be initiated or continued. The issue was decided in favour of the assessee.

Final Conclusion: The writ petitions succeeded and the impugned assessment and recovery actions were set aside in effect by treating the assessments as withdrawn.

Ratio Decidendi: Where returns are subsequently filed with the requisite late fee, an assessment made for non-filing of returns under Section 62 of the GST Act loses its force and cannot support further recovery proceedings.

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