2024 (1) TMI 281 - HC - GST

GST return filing delays can be condoned beyond 30-day limit under Section 62(2) for sufficient cause

HC held that while petitioner failed to file GST returns for December 2022, January 2023, and February 2023 within prescribed time limits, resulting in ... Assessment of non-filers of returns - Best judgement assessment under Section 62(1) of the GST Act - Deemed withdrawal of assessment on filing valid return within thirty days under Section 62(2) - Liability for interest and late fee continues despite deemed withdrawal - Five-year limitation for best judgement assessment - Directory nature of the thirty-day time-limit and power to condone delayDeemed withdrawal of assessment on filing valid return within thirty days under Section 62(2) - Liability for interest and late fee continues despite deemed withdrawal - Effect of filing a valid return within thirty days of service of a best judgement assessment order - HELD THAT: - The Court construed Section 62(2) to mean that where a registered person furnishes a valid return within thirty days of service of an assessment order under Section 62(1), the assessment order shall be deemed to have been withdrawn. The Court further held that notwithstanding such deemed withdrawal, the liability to pay interest under Section 50(1) and late fee under Section 47 continues. This principle was applied to the statutory scheme and recorded as the legal consequence of timely filing within thirty days. [Paras 11]Filing a valid return within thirty days results in deemed withdrawal of the assessment order but the liability for interest and late fee continues.Directory nature of the thirty-day time-limit and power to condone delay - Assessment of non-filers of returns - Whether the thirty-day period prescribed by Section 62(2) is mandatory or directory and whether delay beyond thirty days can be condoned - HELD THAT: - The Court held that the thirty-day period in Section 62(2) is directory and not an absolute bar to the filing of returns. Where a registered person is unable to file returns within thirty days for reasons beyond their control, the competent authority may condone the delay upon receipt of sufficient reasons and permit filing thereafter, subject to payment of interest, penalty and other applicable charges. The Court emphasised that making a best judgement assessment at an early date cannot extinguish the assessee's statutory right to file returns; hence the statutory time-limit must be read as permitting condonation in appropriate cases. The Court directed that applications for condonation, where filed, should be considered on merits. [Paras 13, 15, 16]The thirty-day limit is directory; delay beyond thirty days may be condoned on sufficient reasons and the authority may permit filing of returns subject to applicable interest and penalties.Five-year limitation for best judgement assessment - Best judgement assessment under Section 62(1) of the GST Act - Temporal scope of the assessee's right to file returns in relation to the five-year limitation for best judgement assessment - HELD THAT: - The Court explained that a proper officer may make a best judgement assessment within five years from the date specified under Section 44 for furnishing the annual return for the relevant financial year. In the facts of the case the relevant financial year ends 31.03.2023, so the five-year period commences thereafter and runs until the calendar end of the fifth year. The Court observed that if the assessment is made at a later permissible date within that five-year window, the assessee would still have thirty days thereafter to file returns under Section 62(2). Consequently, the right to file returns is not extinguished merely because an early assessment was made; the statutory limitation period governs when assessments can be made and thus the temporal availability of the thirty-day filing window. [Paras 14]The five-year limitation governs the period during which best judgement assessments may be made; the assessee's right to file returns survives early assessments and remains available in relation to assessments made within the five-year period.Final Conclusion: Petitioner directed to apply for condonation of delay within 15 days; respondent to consider the application on merits within the statutory framework and, if satisfied, condone delay and permit filing of revised returns subject to payment of interest, late fee and other applicable charges. Writ petitions disposed of. Issues involved:The issues involved in this case are related to challenging the best judgement assessment orders passed by the respondent under Section 62(1) of the Goods and Services Tax Act, 2017 for the months of December 2022, January 2023, and February 2023 due to the petitioner's failure to file returns within the prescribed time limit.Summary:The petitioner failed to file returns for the mentioned months within the stipulated time frame, leading to the respondent passing assessment orders under Section 62(1) of the GST Act. The petitioner later filed the returns for December 2022 and January 2023 on 30.04.2023 and for February 2023 on 24.06.2023. The petitioner sought to quash the assessment orders, citing financial difficulties as the reason for the delay.The respondent contended that the petitioner did not file the returns within the specified time limit and argued that the benefit under Section 62(2) of the GST Act is only available if returns are filed within 30 days of receiving the assessment orders.The court examined the provisions of Section 62 of the GST Act, emphasizing that a proper officer may assess the tax liability of a registered person to the best of his judgment if returns are not furnished within the prescribed time frame.Regarding the petitioner's failure to file returns within 30 days as per Section 62(2) of the Act, the court deliberated on whether the petitioner would lose the opportunity to file returns or could still do so by providing valid reasons for the delay.The court highlighted that the 30-day period for filing returns after the assessment order is served is directory in nature and can be condoned if the delay is due to reasons beyond the petitioner's control, subject to payment of applicable charges.The court directed the petitioner to file an application for condonation of delay within 15 days and instructed the respondent to consider the reasons provided by the petitioner before permitting the filing of revised returns.In conclusion, the writ petitions were disposed of with the mentioned directions, and no costs were awarded. The connected miscellaneous petitions were also closed.