ASSESSMENT OF NON-FILERS OF RETURN UNDER GST

[Dr. Sanjiv Agarwal]

Statutory Provision

Assessment of Non-filers of Return (Section 62)

(1) Notwithstanding anything to the contrary contained in section 73 or section 74, where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgement taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.

(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.

The provisions in respect of assessment of non-filers of return are contained in section 62 of the CGST Act, 2017. This section overrides the provisions of section 73 and 74 of the CGST Act, 2017. Accordingly, non-filers of returns shall be assessed as follows:

(a)   the registered taxable person should fail to furnish the monthly return under section 39 or fails to file his final return under section 45,

(b)  The proper officer will issue notice under section 46 and the person who fails to file the return within period allowed in notice under section 46,

(c)   The proper officer may after allowance of 15 days from date of service of notice, proceed to make the best judgment assessment, and

(d)  On the basis of material available with him in his records or gathered by him for the purpose of assessment, proper officer will issue best judgment assessment order.

Thus, best judgment assessment by proper officer will be carried out in case the registered taxable person fails to file the periodical return even after notice given to him in this regard.

It may be noted that, issuance of notice under section 46 is mandatory for commencing proceedings under section 62 and non-issuance of notice under section 46 closes the option to invoke section 62, although other provisions are available to recover the tax dues.

As per Section 62(1) of the CGST Act, 2017, the proper officer is empowered to assess the tax liability on such registered person to the best of his judgment taking into account all the relevant materials which is available or which is gathered and issue an assessment order in Form GST ASMT-13 within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.

 Time limit

The best judgment assessment under section 62 of the CGST Act, 2017 will have to be completed within a period of 5 years from the due date of filing of annual return for the financial year to which tax unpaid relates.

Circumstances for withdrawal of order of best judgment assessment

As provided in sub-section 2 of section 62 of the CGST Act, 2017, in case the taxable person on whom the best judgment order has been served, furnishes a valid return within 30 days of service of best judgment assessment order, the said best judgment order is deemed to have been withdrawn, i.e., automatically. It is important to note that there is no need to seek or apply for the withdrawal of best judgment order framed under section 62 of the CGST Act, 2017. The furnishing of a valid return itself would result in withdrawal of best judgment order under section 62 of the CGST Act, 2017. Further, it may be noted that a return can be considered as valid return, if it is filed after making full payment of tax dues as per such return along with interest and late fee.

However, the liability to pay interest under section 50 of the CGST Act, 2017 and late fees, if any, under section 47 of the CGST Act, 2017 shall continue.

Interest on delayed payment and late fee

As is known that under the GST law, for a return to be valid under GST, the amount of tax calculated as per such return needs to be paid by the taxable person. The order of best judgment assessment is deemed withdrawn only in case the taxable person furnishes the valid return, i.e., also pays the tax calculated as per return section 62 of the CGST Act, 2017 does not preclude the payment of interest under section 50 of the CGST Act, 2017 or payment of late fees under section 47 of the CGST Act, 2017.

Thus, the interest would also be liable to be paid on late deposit of such tax and the taxable person will also be liable for payment of fine for late furnishing of return. Thus, registered person will not get any immunity from interest and late fee leviable.

CBIC clarification

CBIC has clarified vide Circular No. 129/48/2019-GST dated 24.12.2019 that in case of non-furnishing of return under Section 39 or 44 or Section 45 of the CGST Act, 2027 i.e. GSTR-3B, GSTR-4, GSTR-7, GSTR-8 etc. The proper officer is required to be issued for best judgment assessment in FORM GST ASMT-13 under Section 62 of the CGST Act, 2017.

Applicable rules and forms

According to Rule 100 of CGST Rules, 2017, the sub-rule (1) provides as follows:

1) The order of assessment made under sub-section (1) of section 62 shall be issued in FORM GST ASMT-13 and a summary thereof shall be uploaded electronically in FORM GST DRC-07.

Accordingly, following forms are required to be used:

S.No.	Form No.	Purpose
1.	GST ASMT -13	Assessment order
2.	GST DRC – 07	Summary of assessment order to be uploaded electronically