Section 62 of the CGST Act, 2017 as applicable to IGST Act, 2017, CGST Act, 2017 & may also SGST law:
A. Non-filers of returns under the GST law - Registered Persons
Any assessment or determination of tax liability can be recorded in the following two manners :-
• by the taxpayer himself i.e. through self-assessment, or
• by the Assessing Officer i.e. through an assessment order.
It follows that if the taxpayer does not furnish a self-assessment then the Assessing Officer is left with no recourse but to pass an assessment order. Act provides for such an eventuality. Accordingly, if a registered taxable person fails to file
• the monthly return under section 39 (in case of a normal taxable person)
• the quarterly return under section 39 (in case of a person opting for composition)
• the monthly return under section 39 (in case of a person deducting tax at source)
• the monthly return under section 39 (in case of an ISD)
• the final return under section 45 (in case of a person applying for cancellation)
Even after a notice is served under section 46, the proper officer can proceed to assess such person to the best of his judgment after a period of 15 days from the date of the service of notice under section 46. Such assessment order shall be issued in Form GST ASMT 13 and it can be passed 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 payment relates.
Such an order has to be passed after considering the material available on record and other relevant material. Though Best Judgment Assessments are completed on the basis of information and documents available with the Assessing Officer and in accordance with his best judgment, there are certain guidelines which need to be followed. These guidelines are set out in judicial precedents held over a period of time:
• In CST v. H.M. Esufali H.M. Abdulali (1970)90 ITR 271 (SC) it has been observed by the Supreme Court that the assessing authority while making the “best judgment” assessment, no doubt, should arrive at its conclusion without any bias and on rational basis and that the said authority should not be vindictive or capricious and that basis adopted in estimating the turnover should have a reasonable nexus with the estimate made.
• In State of Kerala v. C. Velukutty (1966) 60 ITR 239 (SC), it was observed that limits of powers are implicit in the expression “best of his judgment”. Judgment is a faculty to decide matters with wisdom, truly and legally. Judgment does not depend upon arbitrary caprice of a judge, but on settled and invariable principles of justice and though there is an element of guesswork in a “best judgment” assessment, it shall not be a wild one but shall have a reasonable nexus to the available material and the circumstances of each case.
• The decision of Privy Council in CIT v. Laxminarayan Badridas (1937) 5 ITR 170 rendered on the provisions of the Indian Income-tax Act, 1922 is a classic one in which it was observed that the officer making best judgment assessment should not act dishonestly, vindictively or capriciously because he must exercise “judgment” in the matter. He must make what he honestly believes to be a fair estimate of the proper figure of assessment and for this purpose, he must take into account local knowledge and repute in regard to the taxpayer’s circumstances and all other matters which he thinks will assist him in arriving at a fair and proper estimate and though there must necessarily be a guesswork in the matter it must be a honest guesswork.
The assessment order that has been passed is required to be served on the taxpayer and if the taxpayer files a valid return within 30 days of such service, the said assessment order shall be deemed to have been withdrawn. It is to be noted that a return shall be considered as a valid return only if the tax due according to such return has been paid.
B. Non-filers of returns under GST Law - Unregistered Persons
If any taxable person fails to apply for and obtain registration despite being liable to be registered, or whose registration has been cancelled under sub-section (2) of section 29 but who was liable to pay tax, the proper officer shall assess the tax payable by such person during the period he remains un-registered and pass the order in Form GST ASMT-15. Such order shall be passed after serving a notice in FORM GST ASMT-14 allowing the time of 15 days
• and giving an opportunity of being heard to the taxpayer.
• according to the best of judgment of the Assessing Officer.
• within 5 years from the due date for fifing of the annual return of the relevant year.
These provisions have an overriding effect on provisions of demand and recovery under sections 73 and 74 of the Act. |