Assessment Order under Section 62 Quashed Due to Premature Issuance Before Section 46 Notice

Case Summary:
Case Title: M/s Xestion Advisor Private Limited v. Additional Commissioner Grade II and Another
Court: High Court of Judicature at Allahabad
Petition Number: Writ Tax No. 1465 of 2024
Date of Judgement: 09.04.2025
Category of Dispute: Best Judgment Assessment, Procedural Lapse, Principles of Natural Justice
Relevant Section(s): Section 46 and Section 62 of the CGST Act, 2017

Facts of the Case

• [Para 2-3] The petitioner is a private limited company engaged in management consultancy. An assessment order in Form DRC-07 was passed against it under Section 62 on 21.09.2020 for non-filing of GSTR-3B.

• [Para 3] A notice under Section 46 requiring return filing within 15 days was issued only on 25.09.2020—four days after the assessment order.

• [Para 3] The petitioner subsequently filed a Nil return for April 2020 on 03.12.2020.

• [Para 3] An appeal against the assessment was dismissed on 12.06.2024.

Question(s) in Consideration

• [Para 4, 7] Whether the assessment order dated 21.09.2020 under Section 62 was valid despite the absence of a prior notice under Section 46.

• [Para 4, 7] Whether the proceedings complied with principles of natural justice and procedural requirements under the CGST Act.

Observations of the Court

• [Para 7] The assessment order under Section 62 was passed before issuance of the mandatory notice under Section 46, defeating the opportunity for the petitioner to comply.

• [Para 7] Both the assessment and appellate orders are vitiated by serious procedural infirmities and violation of natural justice.

• [Para 8] The Court relied on the precedent of Vinman Constructions Ltd. v. State of Jharkhand (2022) 93 GST 119 (Jharkhand), where a similar flaw led to the quashing of orders.

Judgement of the Court

• [Para 9-11] The assessment order dated 21.09.2020 and the appellate order dated 12.06.2024 were quashed.

• [Para 11] The matter was remanded back to the Deputy Commissioner, State Tax, Noida, for fresh proceedings with issuance of proper notice under Section 46 within two weeks.

• [Para 12] Any amount deposited shall be subject to the outcome of the fresh proceedings.

Between Fine Lines (Simple Summary)

• The GST Department wrongly passed an assessment order before issuing a statutory notice.

• The taxpayer was denied a fair chance to file returns.

• The High Court quashed both assessment and appellate orders.

• Department must now restart proceedings following correct process.

• Refund or adjustment of deposits will depend on the fresh outcome.

Summary of Referred Cases

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