Best judgement assessment – returns were not filed by the petitioner within the prescribed time limit – What if ?
The honourable High court of Madras in the case of Comfort Shoe Components vs Assistant Commissioner Ambur has delivered an important decision on the question of Assessment on Best Judgement method for registered non-filers
In the present case, the petitioner had not filed the returns for the months of December 2022, January 2023 & February 2023 within the prescribed time limit, and hence the assessment order was passed by the respondent under Section 62(1) of the GST Act on 28.03.2023 and 10.04.2023 on the basis of records available on hand.
One may be aware that in terms of the provisions of Section 62(2) of the GST Act, if a registered person furnishes the valid returns within a period of 30 days of the service of assessment order under Sub-section (1) of Section 62 of the GST Act, the said assessment order would be deemed to have been withdrawn.
However, the liability for the payment of interest of Subsection (1) of Section 50 of the GST Act or for payment of late fee under Section 47 of the GST Act shall continue.
The idea of implementation of the said provision is to afford an opportunity to the registered person to furnish and file the returns within a period of 30 days from the date of service of assessment order, which was passed under Section 62(1) of the GST Act.
What if the petitioner failed to furnish the returns within a period of 30 days as prescribed under Section 62(2) of the GST Act?
The court had held that :-
The limitation of 30 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 control, certainly the said delay can be condonned and thereafter, the Assessee can be permitted to file the returns after payment of Tax, interest, penalty and other charges as applicable.
At any cost, the right to file the returns cannot be taken away stating that the petitioner has not filed any returns within a period of 30 days from the date of best judgement assessment order.
Thus, if any application is filed before the Authority concerned with sufficient reasons for non-filing of returns within the prescribed time limit as per section 62(2) of the Act, the same shall be considered on merits.
If the Authority is satisfied with the said reasons, they can condone the delay and permit the petitioner to file the returns, though, in the present case, no such application was filed by the petitioner.
The petitioner was directed to file an application for condonning the delay in filing the returns within a period of 15 days from the date of receipt of copy of this order.
Upon filing of the application for condonnation of delay, the respondent is directed to consider the said application and pass orders by taking into consideration of the reasons provided by the petitioner for non-filing of returns within a period of 30 days from the service of best judgement assessment order and thereafter, permit the petitioner to file the revised returns.
Well…..
Petition was disposed off and the important takeaway from the judgement is that
at any cost, the right to file the returns by the taxable person cannot be taken away without reasons
Citation:-
2024 (1) TMI 281 – Honourable Madras High Court – Comfort Shoe Components vs Assistant Commissioner (Ambur – Vellore)