Recovery Order Invalid if Return Filed After Assessment Under Section 62: Patna HC
By Author | June 14, 2025
Category: Patna HC, GST Judgement
📝 Case Overview
In M/s Great Eastern Hire Purchase Pvt. Ltd. v. State of Bihar [CWJC No. 18049 of 2024], the Patna High Court set aside a recovery order. It ruled that if a taxpayer files their GSTR-3B return and pays the due tax within 30 days of the assessment order under Section 62, the order is automatically withdrawn under the law. Therefore, any recovery action taken after that becomes invalid.
📌 Facts of the Case
The petitioner challenged a recovery order dated August 24, 2023, and an associated demand order in Form GST ASMT-13 issued on September 12, 2019.
They filed GSTR-3B and paid the tax on September 19, 2019, which was within 30 days of the assessment. Despite this, the Revenue Department proceeded with recovery.
The petitioner relied on Section 62(2) of the CGST Act, which clearly states that an assessment order is deemed withdrawn if a valid return is filed within 30 days.
⚖️ Legal Issue
Is the recovery order valid if the return was filed within 30 days of the assessment under Section 62?
🧑⚖️ Court’s Observations
The Court noted several key points:
- The Revenue ignored its own legal framework by pursuing recovery after the petitioner complied with the tax filing and payment.
- The appeal filed by the petitioner was wrongly dismissed without considering a relevant High Court ruling in SIS Cash Services Pvt. Ltd. v. Union of India [CWJC No. 6514 of 2021].
- The assessment order automatically loses effect once the taxpayer complies within the legal timeframe.
The Court further observed that the recovery action was not just unlawful—it amounted to grave injustice. Since the assessment order was deemed withdrawn, there was no valid reason to initiate recovery.
🧾 Legal Reference: Section 62 of the CGST Act
Section 62(1): Assessment of Non-Filers
If a registered person fails to file returns despite a notice, the tax officer may issue an order based on available data.
Section 62(2): Deemed Withdrawal
If a valid return is filed within 60 days of the order, the order stands automatically withdrawn.
- An additional 60-day extension is allowed with a late fee of ₹100 per day.
- Interest and late fees still apply.
🔍 Final Judgment
The Court ruled as follows:
- The recovery and demand orders were set aside.
- A show cause notice was issued to the Assistant Commissioner to explain why interest and costs should not be recovered from her personally.
- The High Court reinforced the principle that compliance within the legal window must be respected by tax authorities.
🧠 Key Takeaway
The case reaffirms that compliance under Section 62 protects the taxpayer from further recovery. Tax officers must adhere strictly to legal provisions and judicial precedents. Otherwise, their actions may invite legal consequences and personal accountability.
