60-day Time Limit u/s 62(2) of GST Act is Directory, Delay can be Condoned based on Merits with Payment of Interest and Penalty: Madras HC [Read Order]

The Madras High Court has held that the 60-day time limit prescribed under Section 62(2) of the GST ( Goods and Services Tax ) Act, 2017, for furnishing returns after a best judgment assessment is not mandatory but directory in nature.

The bench of Vivek Kumar Singh observed that if a registered taxpayer fails to file returns within the 60-day window due to reasons beyond their control, the delay can be condoned, provided sufficient cause is shown, and the taxpayer is willing to pay interest, penalty, and other applicable charges.

The petitioner, Priya Woods Craft is a  registered taxpayer, had failed to file GSTR-3B returns for the period from October 2018 to March 2019, prompting the tax authorities to issue a best judgment assessment order under Section 62(1) on 26.12.2020, demanding ₹10,00,599.

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Though the petitioner later filed the returns in February 2021 along with applicable interest and late fees, the department continued to enforce the original assessment order. The petitioner approached the High Court seeking quashing of the order, citing ill health as the reason for delay and arguing that under Section 62(2), filing valid returns within 60 days renders the assessment order void.

The Court took note of the statutory provision, which allows for withdrawal of a best judgment assessment if valid returns are filed within 60 days. It stated that the legislative intent behind Section 62(2) is to give an opportunity to taxpayers to comply voluntarily and regularize their filings.

However, the bench clarified that failure to meet this deadline should not lead to automatic denial of the right to file returns if justified reasons are provided. It further observed that the rigid application of the 60-day limit would undermine the purpose of recent amendments to GST law, particularly Section 16(5), aimed at enabling better compliance.

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Since the petitioner had not filed any formal application for condonation of delay, the Court directed him to file such an application within 15 days. The assessing officer was instructed to consider the same on merits and, if satisfied, allow the petitioner to file revised returns after fulfilling statutory liabilities like interest and penalty.

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