Facts of the case:

In this case, the petitioner challenged an assessment order and the corresponding summary order issued in Form GST DRC-07 for the tax period April 2024, passed under Section 62 of the Goods and Services Tax Act, 2017 relating to best judgment assessment for non-filing of returns. Subsequent to the passing of the assessment order, the petitioner filed the pending GST returns along with payment of applicable tax, interest and late fee. Despite compliance by the petitioner, the department sought to continue recovery proceedings on the basis of the earlier assessment order, compelling the petitioner to approach the High Court by way of writ petition.

The petitioner contended that once the pending returns were filed in accordance with law and statutory dues were discharged, the assessment order passed under Section 62 automatically stood withdrawn by virtue of Section 62(2) of the GST Act. The Government Pleader appearing for the department fairly admitted before the Court that the petitioner had indeed filed the returns and that no dues remained payable in relation to the said tax period.

Issue:

Whether an assessment order passed under Section 62 of the GST Act and consequential recovery proceedings could continue to survive after the registered person subsequently files the pending returns along with payment of tax, interest and late fee, in view of the deeming fiction contained in Section 62(2) of the Act.

Held That:

The High Court held that Section 62(2) of the GST Act creates a clear deeming fiction whereby an assessment order passed under Section 62 automatically stands withdrawn once the registered person furnishes the valid returns for the relevant period along with applicable tax, interest and late fee. Since the petitioner had subsequently filed the returns and cleared the statutory dues, the assessment order dated 20.06.2024 and the summary order in Form GST DRC-07 dated 21.06.2024 were deemed to have been withdrawn by operation of law.

The Court accordingly declared that the department could not proceed with recovery based on the said assessment orders. The Court further clarified that any consequential garnishee or attachment proceedings initiated pursuant to the assessment order would also automatically stand set aside.

Case Name: Shah and Shahi Foreign Trade (OPC) (P.) Ltd. v. Deputy Assistant Commissioneri ST dated 06.05.2026