Indubaala Enterprises LLP Vs Deputy Commissioner
Date: October 25, 2025
Subject Matter
Best Judgment Assessment Orders Deemed Withdrawn Upon Late Filing of Returns
Summary
The High Court has allowed three writ petitions filed by a single petitioner, declaring that GST assessment orders passed under the "Best Judgment" provision (Section 62) are deemed to have been withdrawn. The Court held that since the petitioner subsequently filed the required GSTR-3B returns and paid the prescribed late fees, the original demand orders lose their legal force
Summary of Facts and Dispute:
Non-Filing & Assessment: The petitioner failed to file monthly GST returns for April, May, and June 2024. Consequently, the Revenue passed "Best Judgment" assessment orders under Section 62 of the GST Act on various dates in July and August 2024.
Recovery Proceedings: Following these orders, the authorities initiated recovery steps for the assessed tax, interest, and penalties under Section 64.
Late Compliance: The petitioner subsequently filed the missing GSTR-3B returns between December 2024 and January 2025, paying the self-assessed tax along with late fees.
Legal Contention: The petitioner argued that under the statutory scheme, a Section 62 order is automatically withdrawn if the taxpayer files a valid return within a specified period (or extended period with late fees).
Key Legal Issues & Findings:
1. Deemed Withdrawal under Section 62
The Court examined the operation of Section 62(2) of the GST Act. This section provides a special remedial window for non-filers:
If a registered person furnishes a valid return within 60 days (extendable by another 60 days, totaling 120 days) of the service of the assessment order, the said assessment order shall be deemed to have been withdrawn.
The Court noted that even if filing occurs beyond the initial strict timelines, the acceptance of returns with late fees signifies compliance that triggers the withdrawal of the best judgment assessment.
2. Precedents Followed
The Court relied on the Division Bench ruling in Brothers Engineering and Errectors Ltd. vs. State of Andhra Pradesh, which adopted the view of the Madras High Court in Helmet House. These cases established that the legislative intent is to collect actual tax based on returns rather than estimated tax via "Best Judgment," provided the taxpayer eventually complies.
Ruling and Directions:
Orders Deemed Withdrawn: The assessment orders dated 17.08.2024, 12.07.2024, and 12.07.2024 are declared null and void (deemed withdrawn).
Recovery Halted: The Court explicitly directed that no recovery steps can be initiated or continued based on these quashed orders.
Outcome: The petitioner’s actual tax liability will now be governed by the returns filed (GSTR-3B) rather than the Department's previous estimates.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
As all three Writ Petitions arise out of similar facts and have been filed by the same petitioner, they are being disposed of by way of this common order.
2. Heard Sri Anil Kumar Bezawada, learned counsel for the petitioner and the learned Government Pleader for Commercial Taxes, appearing for the respondents.
3. The petitioner was assessed, under the GST Act, for the period June, 2024 onwards, an assessment order, dated 17.08.2024; for the period April- 2024 by an assessment order, dated 12.07.2024 and for the period May- 2024, by way of an assessment order, dated 12.07.2024. All these orders of assessment were passed under Section 62 of the GST Act, on the ground that the petitioner had not filed returns for the said periods.
4. Thereafter, steps have been initiated for recovery of the amounts assessed under the said orders, along with interest and penalty, under Section 64 of the GST Act, by way of recovery proceedings.
5. At that stage, the petitioner had filed these three Writ Petitions challenging the aforesaid impugned orders of assessment. The petitioner contends that the orders passed under Section 62 of the GST Act, would be deemed to have been withdrawn, upon the dealer filing returns within a period of 120 days along payment of the tax declared under the returns and the dealer is also given an additional facility of filing the returns even beyond the said period of payment of late fee prescribed under the Act and Rules.
6. The petitioner contends that the necessary returns, namely GSTR-3B were filed along with payment of late fee and the said order of assessment would have to be deemed to have withdrawn. The details of such filing are as below:
| W. P. No. | Period of Assessment | Date of Assessment order | Date of filing of GSTR-3B |
| 31323 | June-2024 | 17.08.2024 | 07.01.2025 |
| 31324 | April-2024 | 12.07.2024 | 31.12.2024 |
| 31330 | May-2024 | 12.07.2024 | 03.01.2025 |
7. In similar circumstances, a Division Bench of this Court in Brothers Engineering and Errectors Ltd., vs. State of Andhra Pradesh1., had following earlier judgments of the Hon’ble High Court of Madras in Helmet House vs. Deputy State Tax Officer-1, Madurai.,2 had held that the orders of assessment would have to be deemed to have been withdrawn once returns had been filed, within the prescribed time or beyond prescribed time along with payment of late fee.
8. In the present case, the said judgment would apply.
9. Accordingly, these Writ Petitions are allowed declaring that the orders of assessment dated 17.08.2024, 12.07.2024 and 12.07.2024, passed under Section 62 of the GST Act, are deemed to have been withdrawn and no steps for recovery can be initiated or continued for recovery of the taxes and dues raised under the aforesaid orders of assessment. There shall be no order as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
Notes:
1 (2025) 34 Centax 39 (A.P)
2 (2024) 23 Centax 57 (Mad.)