Section 64 of CGST Act, 2017 as applicable under UTGST, IGST Acts, 2017 and may also be applicable to SGST law of respective states
If the proper officer is in possession of any evidence that any person is liable to pay any tax under the provisions of this Act and he has sufficient reason to believe that any delay in assessment will adversely affect the interest of revenue (i.e. the officer has reason to believe that the person would fail to discharge liability of the tax) then the officer may proceed to determine the tax liability of such a person. Such an order shall be passed in Form GST ASMT- 16 and only after the prior sanction of the Additional/Joint Commissioner and it is not mandatory to hear the person whose liability is being assessed.
However, if the liability relates to goods and it is difficult to ascertain the person liable to pay tax then the person in-charge of the goods shall be deemed to be liable to pay the tax and such person shall be assessed to tax under this provision.
If the person assessed to tax files an application in Form GST ASMT17 to the Additional/Joint Commissioner within 30 days of the receipt of the order or if such Additional/Joint Commissioner himself is of the view that the said order is erroneous then such order may be withdrawn by the said Additional/Joint Commissioner. Once such order is withdrawn, the authority is to follow the procedure laid down with regard to adjudication if he comes to a finding that any tax due under the Act has not been paid, whether fully or partly, or any ineligible input tax credit has been availed irregularly or any refund of tax has been erroneously obtained. The order of withdrawal or rejection of application shall be issued in Form ASMT-18.
It has been held by the Courts that the assessing officer cannot be expected to be a silent spectator of the uncertainty as the inherent power given to him in the law is to protect the interest of the revenue which will be frustrated if he fails to act within the time of limitation.
There are two essential conditions that must be fulfilled before this provision is invoked. Firstly, the proper officer must have evidence in his position that the person has incurred, or is likely to incur, a liability to pay tax under this Act and, secondly, the proper officer must have sufficient ground or reason to believe that any delay in assessment will adversely impact the interest of revenue.