2025 (4) TMI 236 - HC - GST

Challenge to assessment orders - condonation of delay in filing returns - returns filed beyond the 30-day period specified in Section 62(2) of the Goods and Services Tax Act 2017 (GST Act) - HELD THAT - Considering the submissions made by the petitioner and in view of the order passed by this Court in COMFORT SHOE COMPONENTS REP BY ITS PROPRIETOR RAFEEQUE AHMED VERSUS ASSISTANT COMMISSIONER AMBUR VELLORE. 2024 (1) TMI 281 - MADRAS HIGH COURT this Court is inclined to condone the delay in filing the returns. While condonning the delay the liberty is granted to the respondent to impose applicable late fee for the delayed period if any against the petitioner. The petitioner is directed to file an application before the respondent for condonning the delay in filing the returns within a period of 15 days from the date of receipt of copy of this order - Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment pertain to:

• Whether the petitioner can file returns beyond the 30-day period specified in Section 62(2) of the Goods and Services Tax Act, 2017 (GST Act) and whether such delay can be condoned.
• The applicability of the five-year period for making a best judgment assessment order under Section 74 of the GST Act.
• The legal implications of the assessment orders issued by the respondent for the months of October 2023 to January 2024.
• The relevance and applicability of a previous court order (W.P.No.34770 of 2023) to the present petitions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Filing Returns Beyond 30-Day Period

• Relevant Legal Framework and Precedents: Section 62 of the GST Act outlines the procedure for assessing non-filers of returns. Subsection (2) allows for the withdrawal of an assessment order if valid returns are filed within 30 days, but it does not explicitly address the situation when returns are filed after this period.
• Court's Interpretation and Reasoning: The Court interpreted Section 62(2) as directory, not mandatory, allowing for the possibility of condoning delays in filing returns if sufficient reasons are provided.
• Key Evidence and Findings: The petitioner failed to file returns within the prescribed 30-day period due to financial constraints. The Court acknowledged the petitioner's situation and the potential for condoning delays.
• Application of Law to Facts: The Court applied the reasoning from a previous judgment (W.P.No.34770 of 2023), which allowed for condoning delays under similar circumstances.
• Treatment of Competing Arguments: The respondent did not oppose the petitioner's request for condonation but sought the imposition of applicable late fees.
• Conclusions: The Court condoned the delay in filing returns, allowing the petitioner to file an application for condonation within 15 days.

Issue 2: Five-Year Period for Best Judgment Assessment

• Relevant Legal Framework and Precedents: Section 74 of the GST Act allows the respondent to make a best judgment assessment within five years from the end of the financial year for which returns are due.
• Court's Interpretation and Reasoning: The Court recognized the five-year timeframe as a period within which the respondent can issue a best judgment assessment, thereby providing a broader window for filing returns.
• Key Evidence and Findings: The assessment orders were issued well before the expiration of the five-year period, and the petitioner argued that this early issuance should not preclude the right to file returns.
• Application of Law to Facts: The Court agreed that the five-year period allows for flexibility in filing returns and that the petitioner's rights should not be curtailed by early assessment orders.
• Treatment of Competing Arguments: The respondent's position was consistent with the Court's interpretation, allowing for the possibility of condoning delays.
• Conclusions: The Court upheld the petitioner's right to file returns within the five-year period, subject to the payment of applicable fees and penalties.

3. SIGNIFICANT HOLDINGS

• Verbatim Quotes of Crucial Legal Reasoning: "The limitation of 30 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 control, certainly the said delay can be condoned."
• Core Principles Established: The Court established that the 30-day period under Section 62(2) is directory, not mandatory, allowing for condonation of delays in filing returns if justified. The five-year period under Section 74 provides a broader context for assessing tax liabilities.
• Final Determinations on Each Issue: The Court directed the petitioner to file an application for condonation of delay within 15 days. Upon acceptance, the respondent is to withdraw the existing assessment orders and issue new ones based on the revised returns. The respondent is granted liberty to impose applicable late fees.