Time Limit for Assessment Under GST Act Clarified by Court: Immediate Action Allowed Upon Detection

The court held that under Section 62 of the Goods and Services Tax Act, the assessing officer can proceed with best judgment assessment immediately upon detecting failure to file returns, with a five-year time limit from the date specified under Section 44 for annual returns. Rejecting the petitioner's argument that assessment should start after December of the financial year, the court clarified that the five-year limit is the maximum duration for assessment, not a specific starting point. As the petitioner did not file valid returns within 30 days of assessment orders, the challenge against the orders was dismissed. Recovery proceedings were stayed for six weeks to allow the petitioner to appeal.

---

---

Issues:
Challenge to assessment orders passed under Section 62 of the Goods and Services Tax Act. Interpretation of Section 62 in relation to Section 44 for completing best judgment assessment.

Analysis:
The petitioner challenged assessment orders passed under Section 62 of the Goods and Services Tax Act, claiming that returns were submitted after the receipt of the orders. However, the returns were not filed within 30 days from the date of service of the assessment orders, hence not qualifying for the benefit under Section 62(2) of the Act. The petitioner argued that the best judgment assessment should be completed only after December of the financial year, as mentioned in Section 44 of the CGST Act. The court considered the arguments and held that Section 62 enables the assessing officer to proceed with the best judgment assessment immediately after detecting the failure to file returns, with a time limit of five years from the date specified under Section 44 for furnishing annual returns.

The court rejected the petitioner's contention that the best judgment assessment should commence only after December following the financial year. It clarified that the outer time limit for completing the best judgment assessment is five years from the date specified under Section 44 of the Act. The court emphasized that the five-year limit is the maximum duration for the assessing authority to exercise its power, not a specific starting point after detecting the default. As the petitioner failed to file valid returns within 30 days of the assessment orders, the benefit under Section 62(2) was not applicable, leading to the dismissal of the challenge against the assessment orders.

Acknowledging the petitioner's intention to appeal the assessment orders, the court directed to halt recovery proceedings for six weeks to allow the petitioner to approach the Appellate Authority. The petitioner was instructed to provide a copy of the writ petition along with the judgment to the respondents for further action.

---