2025 (3) TMI 665 - HC - GST

Seeking to quash the impugned proceedings of the second respondent - failure to file the monthly returns in GSTR - 3B for the months of February 2023 and April 2023 within the due date - HELD THAT - In the present cases the returns were not filed by the petitioner for the months of February 2023 and April 2023 within the prescribed time limit. Hence the impugned orders dated 19.04.2023 and 28.06.2023 have been passed by the second respondent under Section 62(1) of the GST Act. Thereafter the returns were filed by the petitioner for the month of February 2023 on 04.01.2024 and for the month of April 2023 on 09.01.2024. A reading of the provision of Section 62 of the GST Act would make it clear that if any registered person fails to furnish the returns under Section 39 of the Act a proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant materials which are available or which he has gathered and pass an assessment order within a period of 5 years from the date specified under Section 44 of the Act for furnishing of the annual return for the financial year in which the tax was not paid. In the present cases since the petitioner had not filed the returns for the months of February 2023 and April 2023 within the prescribed time limit the assessment orders have been passed by the second respondent under Section 62(1) of the GST Act on 19.04.2023 and 28.06.2023 - 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 60 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order under sub-section (1) of Section 62 of the GST Act the said assessment order would be deemed to have been withdrawn.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 payment of interest of sub-section (1) of Section 50 of the GST Act or for payment of late fee under Section 47 of the GST Act shall continue. What will be the situation if the petitioner failed to furnish the returns within a period of 60 days as prescribed under Section 62(2) of the GST Act? - HELD THAT - The second respondent can make the best judgment assessment order within a period of 5 years from the end of financial year for which the registered person is liable to file the annual returns. In the present cases the relevant financial year is pertaining to 31.03.2023 in which case the petitioner is liable to file the annual returns on or before 31.12.2023. Therefore the said period of 5 years to make the best judgment assessment order for the second respondent will start on 01.01.2024 and ends on 31.12.2029. In such case if the best judgement assessment order is passed by the second respondent on 31.12.2029 which is permissible under Section 74 of the GST Act the petitioner can file his returns within a period of 60 days therefrom i.e . on or before 30.01.2030. Hence the time limit is available up to 30.01.2030 for the petitioner to file her returns - If the best judgment assessment order has not been passed on the earlier date the petitioner can file her returns even without paying any interest or penalty. 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 and thereafter the assessee can be permitted to file the returns after payment of 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 60 days from the date of best judgment 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. The petitioner is directed to file an application for condoning 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 condonation of delay the second 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 60 days from the service of best judgment assessment order and thereafter permit the petitioner to file the revised returns. Conclusion - 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. Petition disposed off.

Summary

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.