Sec 64 – Summary assessment in certain special cases

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Sec 64 – Summary assessment in certain special cases 2017-04-29T13:13:09+00:00

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  • Ashish BadalaCA Ashish Badala
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    (1) The proper officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue:
    Provided that where the taxable person to whom the liability pertains is not ascertainable and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and liable to pay tax and any other amount due under this section.

     
    (2) On an application made by the taxable person within thirty days from the date of receipt of order passed under sub-section (1) or on his own motion, if the Additional Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw such order and follow the procedure laid down in section 73 or section 74.

    Priya MadrechaPriya Madrecha
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    64.1  Analysis
    The word “summary assessment” is generally used in a tax legislation to denote ‘fast track assessment’ based on return filed by the assessee. It allows the Tax Officer to make prima facie adjustments based on errors or factors based on the available information without an occasion for calling for further information from an assessee or inspecting his records. In the GST Act, it is used to denote those assessments which are completed ex-parte and on priority basis when there is reason to believe that there will be loss of tax revenue, if such assessment is delayed. This provision is only the first step in invoking the machinery Provided to enforce recovery of dues from potential defaulters, and this requires an assessment of the tax liability. Such amounts are also colloquially known in the common word as protective assessments which is in a sense protects Government revenue. This section pre supposes the fact that the proper officer be in possession of sufficient grounds to believe that any delay will adversely affect revenue.
    The summary assessment can be undertaken in case all of the following conditions are satisfied:
    •    The Proper Officer must have evidence that there may be a tax liability.
    •    The Proper Officer has obtained prior permission of Additional / Joint Commissioner to assess the tax liability summarily. The proper officer must have sufficient ground to believe that any delay in passing assessment order would result in loss of revenue.
    Summary assessment under this Section of the CGST Act can therefore be construed in some sense as a ‘protective assessment’ carried out in special circumstances, where there are sufficient grounds to believe that taxable person will fail to make payment of any tax, penalty or interest, if the assessment is not completed immediately. Such failure to pay tax, penalty or interest must be due to reasons attributable to the tax payer (ex: insolvency, instances of defaulting, absconding etc). Hence, summary assessment under this Section is not a substitute for assessment getting time barred. Further, mere possibility of non-payment cannot be a grounds for resorting to summary assessment, unless there are factors indicating that such non-payment pertains to admitted or undisputed tax liability. However, it is important to note that upon grant of permission by the Additional / Joint Commissioner, it appears that the evidence available with the Proper Officer or his apprehension of possible loss of revenue, cannot be called into question. The summary assessment order should be in FORM GST ASMT-16.
    The section allows the person who is assessed and is served the order so passed, to come forward and make an application in FORM GST ASMT–17 to the Additional / Joint Commissioner, which will then be examined and if the Additional/ Joint Commissioner is satisfied, the summary assessment order will be withdrawn. As regards the contents of this application, it may be understood that the applicant may attempt to challenge the facts or reasons for the belief about risk of revenue loss and further accept to be available to respond, if proceedings under Section 73/74 were to be undertaken. Besides, the Additional / Joint Commissioner may, on his own motion, withdraw such order and follow the procedure laid down in Section 73 or as the case may be Section 74 for determination of taxes not paid or short paid or erroneously refunded, if he considers that such order is erroneous.
    From the above, it appears that every summary assessment order so withdrawn under subSection (2), must be followed by a notice under Section 73 or as the case may be 74.
    On receipt of application the proper officer has to pass the order of withdrawal or, rejection of the application in FORM GST ASMT-18.
    Many times, summary assessments are undertaken in circumstances, when a taxable person to whom liability pertains is not ascertainable. In such cases, the law provides that, if the liability pertains to supply of goods, then person in charge of such goods shall be deemed to be the taxable person liable to be assessed and pay tax and amount due on completion of                         summary assessment. There is no deeming provision when unpaid tax liability relates to supply of services.
    64.2      Related Provisions
    Section / Rule / Form      Description
    Section 73 &74     Determination of tax not paid, short paid, erroneously refunded
    64.3 FAQ
    Q1.     When can Summary Assessment be initiated?
    Ans. Summary Assessments can be initiated by a proper officer on seeking permission from the Additional Commissioner / Joint Commissioner and proving that the taxable person is liable to pay tax
    64.4 MCQ
    Q1. What is the time period within which a person can apply to the Additional/ Joint Commissioner for withdrawal of such order under this Section?
    (a)    30 days
    (b)    45 days
    (c)    60 days
    (d)    No time limit.
    Ans. (a) 30 days

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