2019 (9) TMI 1245 - HC - GST

Validity of assessment orders passed pursuant to a best judgment assessment - Section 62 of the GST Act - Default in filing of returns - HELD THAT - The statutory prescription of 30 days from the date of receipt of the assessment order passed under sub section (1) of Section 62 has to be strictly construed against an assessee and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute. This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act - the prayer sought for in the writ petition cannot be granted. Petition dismissed.

Summary

Issues:
1. Validity of best judgment assessment orders under the GST Act.
2. Interpretation of Section 62 regarding the filing of returns and payment of tax.
3. Consideration of time frame for withdrawal of best judgment assessment orders.
4. Assessment on best judgment basis in taxing statutes.

Analysis:

The petitioner, an assessee under the GST Act, defaulted on filing returns from May 2018 onwards, leading to best judgment assessment orders by the 1st respondent. The petitioner challenges these orders, citing the provision for setting aside best judgment assessments if valid returns are filed within 30 days. However, the petitioner argues that even if returns are filed within the extended time, they cannot pay the tax liability, seeking to quash the assessment orders for non-adherence to Section 62 guidelines.

Upon review, the Court notes that Section 62 allows best judgment assessments when an assessee fails to furnish required particulars through timely return filing. The provision also permits withdrawal of such orders if valid returns are filed within 30 days, with the liability for interest remaining. Despite the petitioner's claim of arbitrary assessment, the statutory framework provides a remedy through timely return submission and tax payment based on the returns.

The Court emphasizes strict adherence to the 30-day period from the assessment order for filing returns and paying taxes, favoring revenue interests in interpreting taxing statutes. It rejects the petitioner's argument of financial constraints preventing tax payment within the specified timeframe. The Court views the 30-day deadline as crucial for assessee relief, akin to an exemption provision, and declines to extend this period for filing returns beyond what is statutorily prescribed.

Ultimately, the Court dismisses the writ petition, finding no grounds to grant the requested relief, as the statutory provisions under Section 62 of the GST Act clearly outline the procedure for withdrawal of best judgment assessment orders based on timely return filing and tax payment within the specified timeframe.