Dictionary meaning of the word ‘assessment’ is ‘the action of assessing someone or something.’ To assess means, to fix the amount of tax, or to determine such amount and the process of reassessment being for the same purpose is included in the connotation of the term ‘assessment’ vide Income Tax Officer v. K. N. Guruswamy (34 ITR 601– Hon’ble Supreme Court). In the earlier Sales Tax or VAT law, the word ‘assessment’ has not been defined. Section 2 (11) of the CGST Act, 2017 (for short ‘Act’) defines ‘assessment’ as follows:-
“‘Assessment’ means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.”
According to dictionaries, the word ‘determination’ means ‘the process of establishing something exactly by calculation or research.’ Thus the whole process of determination of tax liability under the Act is assessment. Sections 59 to 64 in Chapter XII of the Act deal with ‘assessment’. Sections 73, 74 and 75 in Chapter XV deal with ‘determination of tax’. Different procedures of assessment have been specified for different situations. ‘Proper Officer’ has been defined as follows in Section 2 (91) of the Act:
“(91) “Proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the Central tax who is assigned that function by the Commissioner on the Board.”
Section 59 – Self Assessment
Every registered person shall self-assess the taxes payable under the Act and furnish a return for each tax period as specified under Section 39. Basic idea of having self-assessment procedure is to bring down compliance costs. In this system, tax awareness to the taxable person is important because insufficient tax awareness will certainly result in filing returns with many defects. The burden is on the taxable person to understand, interpret and declare the turnovers and taxes in the returns correctly. Section 122(2) (a) of the Act provides for penalty of ₹ 10,000 or 10% of the tax due, whichever is higher, where tax has not been paid or short-paid or where the ITC has been wrongly availed or utilized. Under clause (b), penalty would be equal to ₹ 10,000 or the tax due, whichever is higher if the above had occurred for reason of fraud or any wilful misstatement or suppression of facts to evade tax.
Section 60 and Rule 98 of the CGST Rules, 2017 (for short ‘Rules’) – Provisional assessment
Provisional assessment is undertaken at the instance of the taxable person. Where the taxable person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may furnish to the proper officer through an application in FORM GST ASMT-01 on the common portal giving reasons for payment of tax on a provisional basis. Proper Officer may call for additional information in FORM GST ASMT-02. Applicant shall file a reply in FORM GST ASMT-03 and also may appear before the officer, if he so desires. The proper officer shall issue an order in FORM GST ASMT-04 allowing the payment of tax on a provisional basis indicating the value or the rate or both on the basis of which the assessment is to be allowed on a provisional basis and the amount for which the bond is to be executed and security to be furnished not exceeding twenty-five per cent of the amount covered under the bond and such order shall be passed within a period not later than ninety days from the date of receipt of such request. The bond shall be executed in FORM GST ASMT-05. One bond is sufficient for the CGST Act, SGST Act and IGST Act.
The proper officer shall, within a period not exceeding six months from the date of the communication of the order issued under sub-section (1), pass the final assessment order after taking into account such information as may be required for finalising the assessment. Such period can be extended up to six months or up to 4 years by specified higher authorities. The proper officer shall issue a notice in FORM GST ASMT-06, calling for information and records required for finalisation of assessment under sub-section (3) of section 60 and shall issue a final assessment order, specifying the amount payable by the registered person or the amount refundable, if any, in FORM GST ASMT-07. The applicant may file an application in FORM GST ASMT-08 for the release of the security furnished under sub-rule (4) after issue of the order under sub-rule (5). The proper officer shall release the security furnished under sub-rule (4), after ensuring that the applicant has paid the amount specified in sub-rule (5) and issue an order in FORM GST ASMT–09 within a period of seven working days from the date of receipt of the application under sub-rule (6). If the tax becomes payable, interest has to be paid by the registered person. If the registered person is entitled for refund as a consequence of final assessment order, interest shall be paid.
Section 61 and Rule 99 of Rules –Scrutiny of returns
The proper officer may scrutinise the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed through a notice in FORM GST ASMT-10 seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.
The registered person may accept the discrepancy mentioned in the notice issued under sub-rule (1), and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT-11 to the proper officer. Where the explanation furnished by the registered person or the information submitted under sub-rule (2) is found to be acceptable, the proper officer shall inform him accordingly in FORM GST ASMT-12. In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate appropriate action including those under section 65 or section 66 or section 67, or proceed to determine the tax and other dues under section 73 or section 74.
Section 62 and Rule 100(1) of Rules – Assessment of non-filers of returns
Notwithstanding anything to the contrary contained in Section 73 or Section 74, where a registered person fails to furnish the return under section 39 (monthly or quarterly return) or Section 45 (final return), even after the service of a notice under Section 46 (provides for issue of notice to registered person who fails to furnish a return u/s 39 or 44 or 45 within 15 days), the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 (31st December) for furnishing of the annual return for the financial year to which the tax not paid relates. Thus for passing an order under Section 62(1), a notice under Section 46 must be first issued. The order of assessment made under sub-section (1) of section 62 shall be issued in FORM GST ASMT-13.
However where the registered person furnishes a valid return within thirty days of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.
Section 63 and Rule 100(2) – Assessment of unregistered persons
Notwithstanding anything to the contrary contained in section 73 or section 74, where a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under sub-section (2) of section 29 but who was liable to pay tax, the proper officer may proceed to assess the tax liability of such taxable person for the relevant tax periods and issue a notice in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis and after allowing a time of fifteen days to such person to furnish his reply, if any, pass an assessment order, in FORM GST ASMT 15 within a period of five years from the date specified under section 44 (31st December) for Furnishing of the annual return for the financial year to which the tax not paid relates. It is mandatory to give an opportunity of being heard.
Section 64 and Rule 100 (3, 4 and 5) –Summary assessment in certain special cases
It is understood from FORM GST ASMT-16 that this summary assessment relates to a situation where it has come to the notice of the proper officer that unaccounted for goods are lying in stock at godown or in a vehicle stationed at the mentioned place and the person is not able to account for the goods or produce any document showing the detail of the goods.
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 in FORM GST ASMT-16, 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.
The person referred to in sub-section (2) of section 64 may file an application for withdrawal of the summary assessment order in FORM GST ASMT–17.
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. The order of withdrawal or, as the case may be, rejection of the application under sub-section (2) of section 64 shall be issued in FORM GST ASMT-18.
Section 127 – Power to impose penalty in certain cases
Where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under section 62 or section 63 or section 64 or section 73 or section 74 or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person.”
Section 83 and Rule 159 – Provisional attachment of property
“Section 83(1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed. Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).