Bridge Hygiene Services Private Limited VS State Tax Officer

The petitioner, an assessee under the Goods and Services Tax Act (GST Act) on the rolls of the 1st respondent, defaulted on filing returns from July 2018 onwards and although there was a default in filing the returns up to July 2018, returns up to August 2018 have later been filed satisfying the tax due with interest; the grievance in the writ petition is against Ext.P1 series of orders of assessment passed by the 1st respondent under Section 62 of the GST Act, pursuant to a best judgment assessment.

The petitioner, an assessee under the Goods and Services Tax Act (GST Act) registered with the 1st respondent, defaulted on filing returns from July 2018 onwards, although returns up to August 2018 were eventually filed along with the tax due and interest; the grievance in the writ petition is against a series of assessment orders (Ext.P1) passed by the 1st respondent under Section 62 of the GST Act following a best judgment assessment; the petitioner’s case in the writ petition is that the Act provides for an automatic setting aside of the best judgment assessment in certain circumstances.

The petitioner, an assessee under the GST Act on the rolls of the 1st respondent, defaulted on filing returns from July 2018 onwards. Although there was a default in filing the returns up to July 2018, the returns up to August 2018 were later filed with the tax due and interest paid. The grievance in the writ petition is against a series of assessment orders passed by the 1st respondent under Section 62 of the GST Act pursuant to a best judgment assessment. The petitioner’s case is that although there is a provision under the Act for an automatic setting aside of the best judgment assessment when a registered dealer furnishes a valid return within 30 days of service of the assessment order, the petitioner sees this provision as futile since even if he 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 in the returns. Therefore, he prays for a direction to quash the orders issued by the 1st respondent on the ground that the 1st respondent, while passing the assessment orders on a best judgment basis, did not adhere to the yardsticks indicated in Section 62 for the exercise of the power.

The petitioner, an assessee under the Goods and Services Tax Act (GST Act), defaulted on filing returns from July 2018 onwards, though returns up to August 2018 were later filed with tax and interest paid. The grievance in the writ petition is against a series of assessment orders passed by the 1st respondent under Section 62 of the GST Act based on a best judgment assessment. The petitioner argues that even though the Act provides for automatic setting aside of such assessments if a valid return is filed within 30 days of the service of the assessment order, this provision is ineffective for him because, even if he files returns within this extended period, he cannot pay the admitted tax liability shown in the returns. Therefore, he seeks to quash these assessment orders, claiming that the 1st respondent did not follow the criteria specified in Section 62 while passing these orders. The court, after considering the case facts and submissions from both sides, finds that Section 62 of the SGST Act applies only when an assessee refuses to furnish the required particulars.

Under the Act, an assessment must be finalized by the proper officer using their best judgment if a return is not filed within the stipulated time, considering all relevant material available or gathered for this purpose. Subsection (2) of Section 62 specifies that if the assessee submits a valid return within 30 days after the best judgment assessment order is served, the order will be deemed withdrawn, although the liability to pay interest for late tax payment remains. This provision clearly outlines the timeframe for filing returns and paying taxes if the assessee wishes to cancel the best judgment assessment.

An assessment under the Act requires the filing of a return within the specified time frame for the proper officer to finalize the assessment based on the best of their judgment using all relevant available or gathered material Subsection (2) of Section 62 states that if the assessee provides a valid return within 30 days after the service of the best judgment assessment order, the order will be withdrawn except for the liability to pay interest for late payment of tax The statutory provisions clearly outline the timeframe within which the assessee must file their return and pay tax based on the returns if they wish to cancel the best judgment assessment In this case, it is undisputed that the assessee failed to file the returns within the time normally available under the SGST Act It is also undisputed that the proper officer was required to complete the assessment on the best judgment basis due to the assessee’s failure to file the returns within the specified time.

The petitioner argues that the assessment on a best judgment basis was arbitrary and did not follow the guidelines stated in the relevant section. However, the statutory provisions allow an aggrieved assessee to file their returns within 30 days and pay the tax based on the return they file. If they do this, the best judgment assessment order by the proper officer will be automatically withdrawn. The petitioner’s counsel contends that even if the petitioner were to file returns within the 30-day period specified in Section 62(2) of the SGST Act, they would still be unable to pay the admitted tax liability due to a lack of funds. Despite this, the statutory requirement of 30 days from the date of receiving the assessment order under subsection (1) of Section 62 must be strictly enforced against the assessee.

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