2019 (9) TMI 1246 - 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. Default in filing returns under the GST Act from April 2018 onwards.
2. Validity of Ext.P1 order of assessment passed by the 1st respondent under Section 62 of the GST Act.
3. Provision for automatic setting aside of best judgment assessment.
4. Interpretation of Section 62 of the SGST Act regarding assessment on best judgment basis.
5. Adherence to guidelines in passing assessment orders.
6. Ability to pay admitted tax liability within the specified time frame.
7. Strict construction of the statutory prescription of 30 days for filing returns.

Analysis:
1. The petitioner, an assessee under the GST Act, defaulted on filing returns from April 2018 onwards. Despite later filing returns up to October 2018 with tax due and interest, the grievance in the writ petition is against the Ext.P1 order of assessment passed by the 1st respondent under Section 62 of the GST Act, following a best judgment assessment.

2. The petitioner argues that the provision for automatic setting aside of best judgment assessment is futile in their case as even if returns are filed within the extended 30-day period, they cannot pay the admitted tax liability. The petitioner seeks to quash Ext.P1 order, alleging non-adherence to the yardsticks in Section 62 for exercising the power of best judgment assessment.

3. The Court considered the provisions of Section 62 of the SGST Act, highlighting that best judgment assessment is necessary when an assessee fails to furnish required particulars for assessment through timely return filing. The section allows for withdrawal of best judgment assessment if a valid return is filed within 30 days of the assessment order, with continued liability for interest on late tax payment.

4. Despite the petitioner's claim of arbitrary assessment, the statutory provisions enable the assessee to challenge the best judgment assessment by filing returns and paying tax within the specified time frame. The Court emphasized strict construction of the 30-day period against the assessee, akin to an exemption provision in a taxing statute, to prevent undue extensions for filing returns and withdrawing best judgment assessments.

5. The Court rejected the petitioner's plea for an extension beyond the prescribed period, emphasizing the need to interpret the statutory provisions strictly in favor of revenue collection. Consequently, the writ petition was dismissed, as the Court found no justification to grant the requested relief based on the interpretation of Section 62 of the GST Act.