Tvl. Priya Woods Craft Vs Commissioner of Commercial Taxes (Madras High Court)
In a ruling that offers a reprieve to taxpayers, the Madras High Court has held that the 60-day time limit prescribed under Section 62(2) of the Goods and Services Tax (GST) Act, 2017, for filing returns after a best judgment assessment order is “directory in nature” and not a mandatory, unbreachable deadline. The court opined that an assessee’s right to file returns cannot be extinguished if they fail to meet this deadline for reasons beyond their control.
The judgment was delivered in the case of Tvl. Priya Woods Craft vs. The Commissioner of Commercial Taxes, where the petitioner challenged a best judgment assessment order issued by the tax authorities.
Case Background
The petitioner, Tvl. Priya Woods Craft, had failed to file its monthly GSTR-3B returns for the period from October 2018 to March 2019. Consequently, the State Tax Officer issued a notice on September 25, 2020, under Section 46 of the Tamil Nadu GST (TNGST) Act, directing the firm to file the pending returns within 15 days.
When the petitioner failed to comply, the officer proceeded to assess the tax liability to the best of their judgment, as empowered by Section 62(1) of the Act. On December 26, 2020, an assessment order was passed, raising a tax demand of Rs. 10,00,599.
The petitioner eventually filed the overdue returns, along with applicable interest and late fees, on February 5 and 6, 2021. However, this was done after the expiry of the statutory period provided under Section 62(2) of the GST Act. The petitioner cited ill-health as the reason for the delay. Despite the returns being filed, the tax authorities insisted on the payment of the demand raised in the best judgment assessment order, prompting the petitioner to approach the High Court.
The Legal Conundrum: Interpreting Section 62(2)
The core of the legal dispute rested on the interpretation of Section 62 of the GST Act. This section outlines the procedure for the assessment of non-filers.
