Salvage Energy Solutions Private Limited vs. Assistant Commissioner Of Commercial Taxes

The first respondent has assumed juri iction to pass Summary Assessment under Section 64 of the KGST Act/CGST Act essentially in the premise that the petitioner has transacted with three suppliers who, as ascertained after an inspection, are not operative from their registered HC-KAR

Mr. Santosh Sagar Kapilavai, the learned counsel for the petitioner, submits that this Court must interfere with the Order dated 07.03.2026 under Section 64(1) of the KGST Act/CGST Act because such order is obviously erroneous and without due opportunity. The learned counsel also submits that:  the first respondent has assumed juri iction without recording that there is sufficient ground for Summary Assessment as a special case because the delay would adversely affect the interest of the Revenue, and  this Court must interfere with the Order dated 07.03.2026 [Annexure – B] under Section 64 of HC-KAR

Mr. K. Hema Kumar, the learned Additional Government Advocate who is assisted by Ms. Malavika Prasad, the learned High Court Government Pleader, submits that the petitioner cannot rely upon the decision of this Court in W.P.No.7795/2026 because in the case of hand, the application under Section 64(2) of the KGST HC-KAR

However, Mr. K. Hema Kumar cannot dispute that the petitioner's request for an early decision on the pending application under Section 64(2) of the KGST Act/CGST Act would be just and reasonable. This Court is not persuaded to interfere with the Assessment Order dated 07.03.2026 when the merits of this petitioner's grievance are yet to be examined under Section 64 of the KGST Act/CGST Act which reads as under. HC-KAR

Summary assessment in certain special cases.- (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.

The proper officer, subject to evidence and recording sufficient reasons to opine that the delay in conclusion of the proceedings would adversely affect interests of Revenue, can proceed to summarily assess the tax liability. Further, there is a remedy to a taxable person under Section 64 of the KGST Act/CGST Act. The concerned taxable person, within thirty [30] days from the date of receipt of the order under Section 64(1) of the KGST Act/CGST Act, or either the Additional Commissioner or the Joint Commissioner on their own motion, could examine whether the Order under Section 64(1) of the KGST Act/CGST Act is erroneous and if such order is found erroneous withdraw the same with liberty to follow the procedure laid down under Sections 73 and 74 of the KGST Act/CGST Act. HC-KAR

The affected taxable person thus has been given immediate remedy but for this remedy to be meaningful, the application under Section 64(2) of the KGST Act/CGST Act must be decided within a reasonable period of time and after extending an opportunity to show cause both against the reason to allege tax liability and to believe that delay would adversely affect the interest of the Revenue. In the present case, the petitioner's application is pending from 06.04.2026, but without any outcome. Therefore, this Court is persuaded to accept the alternative canvass on behalf of the petitioner and dispose of the petition directing the second respondent to consider the petitioner's application in a time bound manner. Hence, the following. ORDER