2025 (4) TMI 556 - HC - GST

Seeking to quash the impugned proceedings of the second respondent in ASMT-13 - withdrawal of assessment order - returns filed beyond the prescribed 60-day period due to ill-health - HELD THAT - In the present case the returns were not filed by the petitioner for the months of October 2018 to March 2019 within the prescribed time limit. Hence the impugned order dated 26.12.2020 has been passed by the second respondent under Section 62(1) of the GST Act. Thereafter the returns were filed by the petitioner for the months of October 2018 and November 2018 on 05.02.2021 and for the months of December 2018 to March 2019 on 06.02.2021. A reading 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 case since the petitioner had not filed the returns for the months of October 2018 to March 2019 within the prescribed time limit the assessment order has been passed by the second respondent under Section 62(1) of the GST Act on 26.12.2020. 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. Conclusion - i) The 60-day period under Section 62(2) is directory allowing for condonation of delay if sufficient reasons are provided. ii) The petitioner is directed to file an application for condonation of delay within 15 days. Petition disposed off.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

1. Whether the petitioner is entitled to the withdrawal of the assessment order under Section 62(2) of the Goods and Services Tax Act, 2017 (GST Act) despite filing returns beyond the prescribed 60-day period due to ill-health.

2. Whether the 60-day period prescribed under Section 62(2) for filing returns is mandatory or directory, allowing for condonation of delay under certain circumstances.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Withdrawal of Assessment Order

Relevant Legal Framework and Precedents: The relevant legal framework is Section 62 of the GST Act, which deals with the assessment of non-filers of returns. Subsection (2) provides that if a registered person furnishes a valid return within sixty days of the service of the assessment order, the assessment order shall be deemed withdrawn.

Court's Interpretation and Reasoning: The Court noted that the petitioner failed to file the returns for the specified period within the prescribed 60-day timeframe due to ill-health. The petitioner argued that the assessment order should be quashed as the returns were eventually filed, albeit late.

Key Evidence and Findings: The petitioner filed the returns on 05.02.2021 and 06.02.2021, beyond the 60-day period from the assessment order dated 26.12.2020.

Application of Law to Facts: The Court acknowledged the petitioner's delay in filing returns and considered whether the delay could be condoned given the circumstances.

Treatment of Competing Arguments: The respondents argued that the petitioner was only entitled to the benefit under Section 62(2) if the returns were filed within the 60-day period. The petitioner sought condonation of the delay due to ill-health.

Conclusions: The Court concluded that the petitioner had not filed an application for condonation of delay. Therefore, the petitioner was directed to file such an application, and the second respondent was instructed to consider the reasons for the delay.

Issue 2: Nature of the 60-day Period under Section 62(2)

Relevant Legal Framework and Precedents: Section 62 of the GST Act, particularly subsection (2), prescribes a 60-day period for filing returns after an assessment order is served.

Court's Interpretation and Reasoning: The Court analyzed whether the 60-day period is mandatory or directory, considering the implications of the amendment in Section 16(5) of the GST Act.

Key Evidence and Findings: The Court noted that the 60-day period is intended to provide an opportunity for the registered person to file returns and have the assessment order withdrawn.

Application of Law to Facts: The Court considered the petitioner's circumstances and the potential for condonation of delay if sufficient reasons are provided.

Treatment of Competing Arguments: The respondents maintained that the 60-day period is a strict deadline, while the petitioner argued for flexibility due to unforeseen circumstances.

Conclusions: The Court determined that the 60-day period is directory rather than mandatory. If the petitioner provides sufficient reasons for the delay, the delay may be condoned, allowing the petitioner to file returns after payment of applicable interest and fees.

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 under Section 62(2) is directory, allowing for condonation of delay if sufficient reasons are provided. The assessee's right to file returns cannot be curtailed solely due to the lapse of the 60-day period.

Final Determinations on Each Issue: The petitioner is directed to file an application for condonation of delay within 15 days. The second respondent must consider this application on its merits and, if satisfied with the reasons for delay, permit the petitioner to file revised returns.

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