SUMMARY ASSESSMENT IN GST IN CERTAIN CASES

[Dr. Sanjiv Agarwal]

Statutory Provision (Section 64)

64. (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.

Section 64 of CGST Act, 2017 provides for summary assessment in certain specified cases or circumstances, i.e.:

1. There being an evidence of tax liability of a person coming to notice of proper officer.
2. To protect the interest of revenue
3. Deeming person in charge of goods to be taxable person where taxable person to whom tax liability pertains is not ascertainable.

It may be noted that summary assessment under section 64 is a fast track assessment in the interest of revenue whereby the proper officer directly issues the assessment order after taking the permission of designated Additional Commissioner or Joint Commissioner, as the case may be.

Summary assessment means determination of tax liability by proper officer on the basis of returns of taxable person and on any evidence in the possession of proper officer without calling the taxable person for his explanation/ clarifications.

The Proper Officers under the provision of section 64 of the CGST Act, 2017, have the power to make summary assessment in following cases:

(a)   He has evidence in his possession that the person has incurred or likely to incur tax liability under this Act.

(b)  He has sufficient grounds to believe that any delay in assessment will adversely affect the interest of revenue.

(c)   The assessment of tax liability is required to protect the interest of revenue.

(d)  He takes the previous approval of Joint/Additional Commissioner for summary assessment

(e)   He makes the determination of the tax liability on the basis of material in his possession by way of issuance of an assessment order on taxable person.

For the purpose of summary assessment, following points are important :

1. It is mandatory for proper officer to obtain prior permission for initiating summary assessment under section 64 of CGST Act, 2017
2. Proper officer cannot initiate the proceedings suo moto on his own
3. Summary assessment must be based on evidence
4. Summary assessment cannot be initiated on the basis of opinion of proper officer as an opinion is not an evidence.
5. Summary assessment can be initiated against any taxable person.
6. Summary assessment can be initiated irrespective of the fact whether taxable person has filed the return or not.

Summary assessment under section 64 of the CGST Act, 2017, can therefore, be construed in some sense as a ‘protective assessment’ carried out in circumstances, where there are grounds to believe that taxable person will fail to make payment of any tax, penalty or interest, if the assessment is not completed immediately.

According to section 64(1) of the CGST Act, 2017, provides that the proper officer needs to make a case for summary assessment on the basis of any evidence in his possession in respect of tax liability of a person. On such he is required to seek previous approval of Additional/Joint Commissioner for doing summary assessment. Thus, summary assessment can not be taken up by proper officer without seeking previous approval of Additional/Joint Commissioner.

Deeming effect

In cases the person who is supposed to be liable is not ascertainable, the provisions in this respect have been provided in section 64 of the CGST Act, 2017 as under:

In case the person to whom the liability pertains is not ascertainable and the tax liability pertains to supply of goods, in such cases, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and pay tax.

It may be noted that there is no deeming provision when unpaid tax liability relates to supply of services.

Circumstances for withdrawal of summary assessment

As provided in section 64(2) of the CGST Act, 2017, a summary assessment order served by the proper officer under section 64(1) of the CGST Act, 2017, can be withdrawn in following cases:

(a)   On an application by taxable person to be made by him within 30 days of receipt of order on him.

(b)  By Joint/Additional Commissioner suo-moto in case they consider that on facts and circumstances of the case, such summary order is erroneous.

When a summary assessment order served by proper officer is withdrawn either on the application of taxable person or suo-moto by Joint/Additional Commissioner, as the case may be, the proper officer may start the proceedings for determination of tax under section 73 or section 74, i.e., determination of tax not paid or short paid or erroneously refunded, of the CGST Act, 2017, as the case may be.

It may be noted that every assessment order so withdrawn under sub-section (2), must be followed by a notice under section 73 or section 74 of the CGST Act, 2017.