Synopsis: The Hon’ble High Court in the matter of Bridge Hygiene Services Private Limited v. State Tax Officer has denied extension in the period prescribed under Section 62(2) of CGST Act for filing a return for getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the CGST Act.
Facts:
Bridge Hygiene Services Private Limited (“the Petitioner”) defaulted on filing of returns from July 2018 onwards but returns upto August 2018 have later been filed satisfying the tax due with interest. The State Tax Officer (“the Respondent”) issued series of orders of assessment under Section 62 of the CGST Act, 2017 (“CGST Act”) pursuant to a best judgment assessment.
Petitioner’s contention:
The case of the Petitioner is that although there is a provision under the CGST Act for an automatic setting aside of the best judgment assessment in circumstances where the registered dealer furnishes a valid return within 30 days of service of the assessment order, the Petitioner sees this provision as futile in his case inasmuch as even if the Petitioner were to file the returns within the extended time of 30 days from the date of receipt of the best judgment assessment orders, he would not be in a position to pay the admitted tax liability as reflected from the returns.
It is therefore that he prays for a direction to quash the orders issued by the Respondent on the ground that while passing the said assessment orders on best judgment basis, it did not adhere to the yardsticks indicated in Section 62 for exercise of the power.
Issue involved:
Whether extension can be granted under Section 62 of the CGST Act to file return?
Held:
The Hon’ble HC, Kerala discussed Section 62(1) of the CGST Act in WP(C). No. 25066 of 2019(G) dated September 23, 2019 and held as under-
- The statutory prescription of 30 days from the date of receipt of the assessment order passed under Section 62(1) of the CGST Act has to be strictly construed against the Petitioner and in favour of the revenue, since this is a provision in a taxing statute that enables an assessee to get an order passed against him on best judgment basis set aside. The provision must be interpreted in the same manner as an exemption provision in a taxing statute.
- The HC said that it is not justified to grant an extension of the period contemplated under Section 62(2) of the CGST Act, so as to enable the Petitioner to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the CGST Act.
Relevant Provisions:
Section 62 of the CGST Act
“62. Assessment of non-filers of returns.
(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.”