Assessment order based on best judgement decision is not treated as invalid where Assessee has failed to furnish returns even after best judgement assessment.

Case Title: Wild Tree Resorts vs State Tax Officer

Court: High Court of Kerala

Petition No.: WP(C) No. 35124 of 2019

Date of Judgement: 19 December 2019

Category: Assessment Order – Best Judgment Assessment

Relevant Sections: Section 62 of the CGST/KSGST Act, 2017

Facts of the Case [¶1]

The petitioner, Wild Tree Resorts, challenged a series of best judgment assessment orders (Ext. P1) for the period from August 2017 to March 2018. The assessments were made under Section 62 of the CGST/KSGST Act due to the petitioner’s failure to file statutory returns within the prescribed time. The assessment orders clearly stated that if the returns were filed within 30 days of the service of the order, the orders would be deemed withdrawn.

Despite this provision, the petitioner failed to file returns within the 30-day period. Consequently, the authorities finalized the assessment and initiated recovery actions.

Question(s) in Consideration [¶1]

Whether the best judgment assessment orders passed under Section 62 of the GST Act can be interfered with by the High Court in a writ petition when:

1. Returns were not filed within 30 days,
2. An alternative appellate remedy was available to the petitioner.

Observations of the Court [¶1–2]

• The Court noted that the assessment orders were passed strictly in accordance with Section 62 of the GST Act due to non-filing of returns.
• The orders explicitly allowed for deemed withdrawal if returns were filed within 30 days, which the petitioner failed to do.
• The Court observed that the petitioner had an effective alternative remedy available by way of appeal before the appellate authority under the GST Act.
• Based on the petitioner’s request, the Court granted temporary relief by staying recovery proceedings for one month to allow time for filing an appeal.

Judgement of the Court [¶2]

The Court dismissed the writ petition, upholding the legality of the best judgment assessments under Section 62 of the CGST/KSGST Act. However, it directed the tax authorities to keep the recovery proceedings in abeyance for one month to enable the petitioner to approach the Appellate Authority. The petitioner was also directed to furnish a copy of the judgment to the second respondent for necessary action.

Between Fine Lines

• If returns are not filed, best judgment assessments under Section 62 are lawful.
• The 30-day statutory window for rectification must be utilized diligently.
• Writ petitions are not entertained when an effective appellate remedy exists.
• The Court may allow limited time to pursue appellate remedies despite procedural lapses.
• Courts uphold statutory mechanisms before granting extraordinary relief.

Summary of Referred Cases

Takeaway

“Lapse to File, No Shield in Writ: Statutory Remedies Must Prevail”