What does the Section Say?

Section 63 applies where a person liable for GST registration fails to obtain registration or where a registration has been cancelled but tax remains payable. In such cases, the proper officer can determine tax liability through best judgment assessment.

Before passing the order, the officer provides the person with an opportunity of being heard. The assessment is based on available evidence such as business records, bank transactions, purchase information, e-way bills, third-party data, and market information.

The assessment order must generally be issued within the statutory time limits prescribed under the GST law. The purpose of this provision is to prevent revenue loss where businesses conduct taxable activities without registration.

The section ensures that tax liability cannot be avoided merely because a person has not taken GST registration. It protects government revenue while also ensuring principles of natural justice by giving the taxpayer an opportunity to explain.

Example

A business crosses the GST registration threshold but does not obtain registration. During investigation, the department identifies taxable turnover and assesses GST liability under Section 63.

Key Points

• Applicable to unregistered taxable persons.
• Best judgment assessment by officer.
• Opportunity of hearing mandatory.
• Prevents tax evasion through non-registration.
• Assessment based on available evidence.

One-Line Summary

Section 63 allows tax assessment of persons who are liable for GST registration but remain unregistered.