ASSESSMENT UNDER GST – SECTION 62
As we know that five years period of GST is going to be passed on 30-06-2022. We are observing that day by day GST is being full proofed and everything is going to be prepared by default such as preparation of return GSTR-3B, calculation of late fee, calculation of interest, GSTR-9 and GSTR-1 in the case of taxable person to whom e-invoice provisions are applicable etc..
In this article I shall discuss how the officer can proceed for assess the tax liability under section 62 against Non-Filers of Returns.
The Assessment procedure under the GST is mainly self-assessment. The GST Authority shall not assess each and every taxable person year wise as was done in VAT regime. The GST Authority has also not been empowered to interfere in the self-assessment until there is any discrepancy come to the notice of the Authority. The GST Authority shall have been empowered under section 62 to assess the person who has not furnished the returns as required under section 39 or section 45.
Conditions for Section 62
First Condition – The registered person fails to furnish the return under section 39 or section 45.
Second Condition – The notice for not filing of the return shall be issued on form GSTR-3A as per section 46 read with rule 68 CGST.
Third Condition – The registered person shall have not furnished the return within 15 days from the date of notice issued under section 46 of CGST Act.
Fourth Condition – The Officer may proceed to assess the tax liability of the said person to the best of his judgment. 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 as per rule 100(1) CGST.
The Officer cannot overtake to section 46. He shall have to issue a notice in form GSTR-3A under section 46 before assessing the tax liability under section 62 of the CGST.
Withdrawn of the order ASMT-13
Order issued under section 62(1) of the CGST Act in form GST ASMT-13 shall be deemed to be withdrawn if the valid return shall have been furnished by the person within 30 days of the service of the assessment order.
LIFE LINES TO THE RETURN DEFAULTER
The Legislature provide two life lines to the non-filer of return.
One if the return has been furnished within 15 days of the date of notice issued in form GSTR-3A under section 46 of the CGST Act and other if the valid return has been furnished within 30 days of the service of the assessment order issued under section 62(1) of the CGST Act in form ASMT-13.
DATA FOR ASSESSING THE TAX LIABILITY
Details of outward supplies available in the statement furnished under section 37 (FORM GSTR-1), details of supplies auto-populated in FORM GSTR-2A, information available from e-way bills, or any other information available from any other source, including from inspection under section 71 etc..
CASE LAWS
M/s VINMAN CONSTRUCTIONS LIMITED – 2022-VIL-157-JHR
The assessment order as also the Summary of the Order in DRC-07 are set aside. The impugned assessment order passed under section 62 of the Act by the Respondent No. 2 suffers from a serious lacuna due to non-issuance of notice under section 46 of the Act. The assessment order itself suffers from serious infirmities for non-compliance of principles of natural justice and procedural requirement prescribed under the Act. In the absence of proper notice upon the petitioner, the impugned action has led to serious penal consequences which cannot be sustained in view of serious infirmities in the procedure adopted by the Assessing Officer.
ASSOCIATE DECOR LTD – 2021-VIL-535-KAR
The time period of 30 days as contemplated under section 62(2) shall be reckoned from the permission of the Hon’ble Court.
The Court held that in light of permission granted by the court, the petitioner could continue to file the return within the time granted by the Court and the return filed was a return as contemplated under Section 62(2) which is to be construed to be return filed within the time. If that were to be so, the return filed in terms of the Court order was a return in terms of Section 62(2) and the best judgment assessment orders passed under Section 62(1) would stand withdrawn.
M/s BRIDGE HYGIENE SRVICES PVT LTD – 2019-VIL-525-KER
The appellants have failed to take advantage of the provisions contained in sub-section (2) of Section 62 of the Act, by furnishing valid returns within 30 days after receipt of the impugned orders of assessment, which if done could have saved them from the liability under the impugned orders. It may not be possible for the Court to exercise the jurisdiction under Article 226 in order to extend the time limit stipulated under sub-section (2) of Section 62, for enabling the appellants to file the returns, beyond the period of 30 days stipulated – the prescription of 30 days from the date of receipt of the order of assessment passed under sub-section (1) of Section 62, stipulated under sub-section (2), has to be strictly construed, since it is a provision contained in a taxing statute which enables the assessee to get the order passed against him on best judgment assessment basis, set aside – there exists no special circumstances warranting interference of this court to hold that the impugned assessments are per se illegal or unsustainable.
Joy Mathew v. Union of India – [2020] 120 taxmann.com 344 (Kerala)
On a plain reading of Section 62 (2), extracted in paragraph 18 of the writ petition which I need not reproduce it again, it is not in doubt that whenever an assessee fails to file a return an assessing officer is required to send the assessment order in terms of provisions section 62 (1) of the Act but, there is a caveat in terms of provision under section 62 (2) where on receipt of such information, as noticed above, was received by the petitioner on 27.10 2019, petitioner filed the returns on 25-10-2019 within 30 days. There could not have been an occasion for issuing of recovery notices as assessment orders Ext.P4 were in law required be withdrawn. There appears an apparent error and omission on the part of the revenue in not adhering to the fact referred (supra). For the reasons aforementioned impugned recovery notices Ext.P8 are set aside. Writ petition is allowed.
RELEVANT PROVISIONS AND CIRCULAR
SECTION 62 CGST ACT
(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 judgment 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 of the section are analyzed as under:
1. This section empowers the proper officer to assess the tax liability of the said person who had not furnished returns which are required to be furnished under section 39 and section 45. The returns specified under section 39 and section 45 are as under:
| Section | Rule | Form Number | Tax Payer |
| 39(1) | 61 | GSTR-3B | Regular Tax Payer |
| 39(2) | 62 | CMP-08 & GSTR-4 | Composition Dealer |
| 39(3) | 66 | GSTR-7 | TDS Return |
| 39(4) | 65 | GSTR-6 | Input Service Distributor |
| 39(5) | 63 | GSTR-5 | Non-Resident Taxable Person |
| 45 | 81 | GSTR-10 | Final Return to be furnished after cancellation of the registration |
2. Before assessing the liability, the Proper Officer shall issue notice in form GSTR-3A as per section 46 read with rule 68 to furnish the return within fifteen days. The notice shall be issued electronically.
3. The Tax Liability shall be assessed by best judgement of the Proper Officer while taking into account all the relevant material which is available or which he has gathered.
4. Limitation Period to issue the Assessment Order– Such Assessment Order shall be issued within five years from the due date for furnishing of the Annual Return for the financial year to which this assessment pertains. For example, if returns not furnished for the financial year 2018-19 then maximum time period of five years to assess the tax liability shall be start from the date 31-12-2019. The date 31-12-2019 was due date to furnish the Annual Return for the F.Y.2018-19.
5. Assessment Order deemed to be withdrawn if the registered person furnishes a valid return within thirty days of the service of the assessment order.
6. Valid Return means as per section 2(117) of the CGST Act is “valid return” means a return furnished under sub-section (1) of section 39 on which self-assessed tax has been paid in full.”
7. Liability to pay interest and late fee shall have to pay by the registered person according to law.
Circular
Standard Operating Procedure guidelines issued by the Department vide Circular No. Circular No. 129/48/2019 dated 24-12-2019.
4. Following guidelines are hereby prescribed to ensure uniformity in the implementation of the provisions of law across the field formations:
(i) Preferably, a system generated message would be sent to all the registered persons 3 days before the due date to nudge them about filing of the return for the tax period by the due date.
(ii) Once the due date for furnishing the return under section 39 is over, a system generated mail / message would be sent to all the defaulters immediately after the due date to the effect that the said registered person has not furnished his return for the said tax period; the said mail/message is to be sent to the authorized signatory as well as the proprietor/partner/director/karta, etc.
(iii) Five days after the due date of furnishing the return, a notice in FORM GSTR-3A (under section 46 of the CGST Act read with rule 68 of the CGST Rules) shall be issued electronically to such registered person who fails to furnish return under section 39, requiring him to furnish such return within fifteen days;
(iv) In case the said return is still not filed by the defaulter within 15 days of the said notice, the proper officer may proceed to assess the tax liability of the said person under section 62 of the CGST Act, to the best of his judgement taking into account all the relevant material which is available or which he has gathered and would issue order under rule 100 of the CGST Rules in FORM GST ASMT-13. The proper officer would then be required to upload the summary thereof in FORM GST DRC-07;
(v) For the purpose of assessment of tax liability under section 62 of the CGST Act, the proper officer may take into account the details of outward supplies available in the statement furnished under section 37 (FORM GSTR-1), details of supplies auto-populated in FORM GSTR-2A, information available from e-way bills, or any other information available from any other source, including from inspection under section 71;
(vi) In case the defaulter furnishes a valid return within thirty days of the service of assessment order in FORM GST ASMT-13, the said assessment order shall be deemed to have been withdrawn in terms of provision of sub-section (2) of section 62 of the CGST Act. However, if the said return remains unfurnished within the statutory period of 30 days from issuance of order in FORM ASMT-13, then proper officer may initiate proceedings under section 78 and recovery under section 79 of the CGST Act;
5. Above general guidelines may be followed by the proper officer in case of non-furnishing of return. In deserving cases, based on the facts of the case, the Commissioner may resort to provisional attachment to protect revenue under section 83 of the CGST Act before issuance of FORM GST ASMT-13.
6. Further, the proper officer would initiate action under sub-section (2) of section 29 of the CGST Act for cancellation of registration in cases where the return has not been furnished for the period specified in section 29.
To reach to me for any suggestions, rectifications, amendments and/or further clarifications in regard of this article my email address is pkmgstupdate@gmail.com.
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