TIME LIMIT FOR FILING RETURN AFTER BEST JUDGMENT ORDER

[DR.MARIAPPAN GOVINDARAJAN]

Returns

A registered person is liable to file return for his outward supplies in GSTR – 1 and inward supplies in GSTR – 2 every month and also to file GSTR – 3B on 20^th day of the succeeding month of a tax period. If a registered person failed to furnish the said form, the Assessing Officer shall issue a notice to the registered person directing him to file the return within 15 days from the date of receipt of the order.

Non-filers of return

Section 62(1) of the GST Act provides that where a registered person fails to furnish the return, 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.

Section 62(2) of the GST Act provides that where the registered person furnishes a valid return within 60 days (30 days before 01.10.2023) of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.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 proviso to section 62(2) provides that where the registered person fails to furnish a valid return within 60 days of the service of the assessment order under sub-section (1), he may furnish the same within a further period of 60 days on payment of an additional late fee of Rs.100/-  for each day of delay beyond 60 days of the service of the said assessment order and in case he furnishes valid return within such extended period, the said assessment order shall be deemed to have been withdrawn, but the liability to pay interest under sub-section (1) of section 50 or to pay late fee under section 47 shall continue.

Case law

In TVL. UTHAPURAM KANMOI PASANA VIVASAIGAL SANGAM REP. BY ITS PROPRIETOR P. SONAIMUTHU VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISIONER, THE ASSISTANT COMMISSIONER (CIRCLE), MADURAI - 2025 (4) TMI 163 - MADRAS HIGH COURT, the petitioner failed to file the return GSTR – 3B for the month of February 2022.  Therefore, the second respondent, the Assistant Commissioner issued a show cause notice on 26.03.2022 under Section 46 of the Act. In the show cause notice, the petitioner was directed to file the GSTR-3B for February 2022 within 15 days from the date of receipt of the show cause notice.  Still the petitioner did not file the return.  Therefore, the Assessing Officer made assessment under Best Judgment method and passed order on 12.05.2022.  In the said order the petitioner was directed to pay a sum of Rs.3,05,934/-. 

As per section 62(2) of the Act the petitioner is to file the return within 60 days from the date of passing best judgment order.  The petitioner could not able to file the return within the said 60 days’ time due to his ill-health.  The petitioner filed the return on 25.11.2024.  Despite filing the return by the petitioner, the Assistant Commissioner insisted for the payment of Rs.3,05,934/- as ordered by him on 12.05.2022.  Being aggrieved against this the petitioner filed the writ petition before Madras High Court.

The petitioner submitted the following before the High Court-

• As per Section 62(2) of the GST Act, if an assessee filed his/her returns within a period of 60 days from the date on which the assessment order was served to him / her, the said assessment order passed by the Department will be deemed to be withdrawn. 
• There was a delay in filing the returns due to ill-health of the petitioner. 

Therefore, the petitioner prayed the Court to condone the said delay and to quash the impugned assessment orders passed by the second respondent.

The Revenue contended that only if the returns were filed within a period of 60 days from the date on which the best judgement assessment orders were served, the petitioner is certainly entitled to avail the benefit, which is available under Section 62(2) of the GST Act.  In the present case the petitioner did not file the return within the period as stipulated under Section 62(2) of the Act.  Therefore, the Revenue prayed the Court to dismiss the writ petition and pass appropriate order.

The High Court considering the submissions of the parties analysed the facts of the case and the records available.  The High Court also analysed the provisions of Section 62 of the Act.  On analysing the sections of the GST Act relating to filing of returns the High Court observed 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 case, the High Court observed that the petitioner did not file return form GSTR – 3B and even after issuing of show cause notice under Section 36, the Assessing Officer assessed under best judgment considering the available facts and records. Section 62 gives opportunities to a Registered person who did not file return under the Act. If the petitioner failed to furnish the returns within a period of 60 days as prescribed under Section 62(2) of the GST Act. Whether the petitioner will lose his opportunity to file the returns or the petitioner will still be entitled to file the returns by providing sufficient reasons for non-filing of returns, whereby enabling the second respondent to condone the delay and accept the returns of the petitioner.

The High Court observed that the second respondent can make assessment order within 5 years from the end of the financial year for which the registered person is liable to file annual returns.  The relevant financial year is pertaining to 26.03.2022, in the petitioner’s case and he is liable to file the annual returns on or before 31.12.2022. Therefore, the said period of 5 years to make the best judgment assessment order for the second respondent will start on 01.01.2023 and ends on 31.12.2028. In such case, if the best judgement assessment order is passed by the second respondent on 31.12.2028, 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 28.02.2029. Hence, the time limit is available up to 28.02.2029 for the petitioner to file his returns. Since the best judgment assessment order has been made by the second respondent at the earliest point of time, the legal right of the petitioner to file the returns, which is available under Section 62 of the Act, cannot be taken away. 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 High Court has further observed that if the petitioner could not file the return which is beyond is control the delay can be condoned and the petitioner may be permitted to file the return on payment of interest and penalty.  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 High Court directed the petitioner to file an application before the Assessing Officer for condoning the delay in filing the returns.  The High Court also directed that the Assessing Officer shall consider the said application for condonation of delay 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.