Assessment orders under s.62(1) for GSTR-3B failures upheld; s.62(2) 60-day deeming rule held directory, delay condonable

HC refused to quash assessment orders issued for failure to file GSTR-3B for Feb and Apr 2023, holding those orders valid under s.62(1). The court held the s.62(2) 60-day deeming withdrawal is directory and delay may be condoned; statutory five-year assessment window runs from 01.01.2024 to 31.12.2029, allowing return filing up to 30.01.2030 if a best-judgment order is passed on the last permissible date. Petitioner directed to seek condonation within 15 days; respondent to decide and permit filing of revised returns on merits, after applicable interest/penalty.

---

---

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

1. Whether the petitioner's failure to file returns within the prescribed 60-day period under Section 62(2) of the Goods and Services Tax Act, 2017 (GST Act) results in a permanent loss of the opportunity to file such returns.

2. Whether the petitioner can seek condonation of delay in filing returns beyond the 60-day period due to circumstances beyond her control, such as ill-health.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Failure to File Returns within 60 Days under Section 62(2) of the GST Act

Relevant Legal Framework and Precedents:

Section 62 of the GST Act deals with the assessment of non-filers of returns. Sub-section (1) allows the proper officer to assess the tax liability of a person who fails to furnish returns, using the best of his judgment. Sub-section (2) provides that if the registered person furnishes a valid return within 60 days of the service of the assessment order, the assessment order shall be deemed withdrawn, although interest and late fees remain payable.

Court's Interpretation and Reasoning:

The Court interpreted Section 62(2) as providing a directory, rather than mandatory, 60-day period for filing returns. The Court emphasized the legislative intent to afford an opportunity to file returns within this timeframe, rather than to permanently bar the filing of returns after 60 days.

Key Evidence and Findings:

The petitioner failed to file returns for February and April 2023 within the prescribed period due to ill-health. The assessment orders were issued on 19.04.2023 and 28.06.2023, respectively, but the returns were filed on 04.01.2024 and 09.01.2024, beyond the 60-day period.

Application of Law to Facts:

The Court considered the petitioner's inability to file returns within the 60-day period due to ill-health as a valid reason to potentially condone the delay. It acknowledged that the petitioner's right to file returns should not be entirely negated due to circumstances beyond her control.

Treatment of Competing Arguments:

The respondent argued that the petitioner was not entitled to the benefits under Section 62(2) as the returns were filed beyond the 60-day period. The Court, however, found that the provision should not be interpreted to permanently bar the petitioner from filing returns if valid reasons for delay are provided.

Conclusions:

The Court concluded that the 60-day period is directory and that the petitioner should be allowed to file an application for condonation of delay, which the authorities should consider on its merits.

Issue 2: Condonation of Delay Due to Circumstances Beyond Control

Relevant Legal Framework and Precedents:

The GST Act does not explicitly provide for condonation of delay beyond the 60-day period. However, the Court interpreted the Act to allow for such condonation if sufficient reasons are provided.

Court's Interpretation and Reasoning:

The Court reasoned that the right to file returns should not be curtailed if the delay was due to reasons beyond the petitioner's control. It emphasized the need to balance the strict application of statutory timelines with fairness to the taxpayer.

Key Evidence and Findings:

The petitioner cited ill-health as the reason for the delay in filing returns. The Court found this to be a potentially valid reason for condonation, subject to further assessment by the relevant authority.

Application of Law to Facts:

The Court directed the petitioner to file an application for condonation of delay, which should be assessed by the authorities based on the reasons provided.

Treatment of Competing Arguments:

The respondents maintained that the statutory period should be adhered to strictly. The Court, however, found that fairness and justice required consideration of the petitioner's circumstances.

Conclusions:

The Court concluded that the petitioner should be allowed to apply for condonation of delay, and the authorities should assess the application on its merits.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"The limitation of 60 days period prescribed under Section 62(2) of the Act appears to be directory in nature and if the assessee was not able to file the returns for the reasons, which are beyond his/her control, certainly the said delay can be condoned."

Core Principles Established:

The 60-day period for filing returns under Section 62(2) of the GST Act is directory, not mandatory. Taxpayers may seek condonation of delay if they provide sufficient reasons for not filing within the prescribed period.

Final Determinations on Each Issue:

The petitioner is directed to file an application for condonation of delay within 15 days. The authorities must consider this application and, if satisfied with the reasons provided, allow the petitioner to file revised returns.

---