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Assessment of non-filers of returns Section 62 - GST Ready Reckoner - GSTExtract Assessment of non-filers of Returns Section 62(1) of the CGST Act, 2017 These provisions have an overriding effect on provisions of demand and recovery under sections 73 and 74 of the Act . 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 or quarterly return under section 39 the final return under section 45 (in case of a person applying for cancellation) Even after a notice is served under section 46 . Action taken by Proper Officer In case of failure to furnish the return under Section 39 or Section 45 or section 46 within 15 days of the issue of such notice Assessment Order has to be issued within a period of 5 years from the due date of filing of annual return (specified under section 44) for the year to which return not filed relates. it means that if transaction of non filer pertain for F.Y. 2017-18, then, the proper officer pass till 31 Dec. 2018+ 5 year i.e. 31 dec. 2023. a summary of form GST ASMT-13 shall be uploaded electronically in form FORM GST DRC-07 . Proper officer specified under Circular No. 3 / 3 / 2017 - GST dated 05/07/2017 clarifies Superintendent of Central Tax shall be the proper officer for the purpose of best judgement assessment under Section 62(1) of CGST ACT. Amnesty scheme for deemed withdrawal of assessment orders issued under Section 62 of CGST Act [ NOTIFICATION NO. 06 / 2023 CENTRAL TAX (as amended time to time ) ] The assessment order under section 62(1) of the CGST Act issued on or before 28.02.2023 in respect of the registered person who has failed to furnish a valid return within a period of 30 days of the service of such assessment order shall be deemed to be withdrawn , if such registered person furnishes the said return on or before 31.08.2023 along with interest due under section 50(1) and late fee payable under section 47 . The above benefit shall be available irrespective of whether or not an appeal has been filed against such assessment order under section 107 or whether or not the appeal, if any, filed against the said assessment order has been decided. Consequences in case of valid Return in pursuit to Assessment Order Section 62(2) states that If the registered person furnishes a valid return within 30 days (Omitted By F.A. 2023 ) 60 days ( w.e.f. 01.10.2023 ) of service of Order, then Order shall be deemed to be withdrawn the liability for payment of interest or late fee continues. Levy additional late fee beyond the 60 days:- Where the registered person fails to furnish a valid return within 60 days of the service of the assessment order under section 62(1), he may furnish the same within a further period of sixty days on payment of an additional late fee of one hundred rupees for each day of delay beyond sixty days of the service of the said assessment order; and In case he furnishes valid return within such extended period the said assessment order shall be deemed to have been withdrawn, but the liability to pay interest under section 50(1) or to pay late fee under section 47 shall continue. Follow Standard Operating Procedure:- CBIC has issued Standard Operating Procedure to be followed during the course of assessment of non-filer or return . [ Circular No. 129/48/2019 GST ] Consequences in case of invalid Return in pursuit to Assessment Order [ First Proviso Section 62(2) ] Further Section 62(2) Provides that If the person does not furnish a valid return within 30 days 60 days of service of Order, then demand as determined by the officer shall be recoverable from the taxpayer These guidelines are set out in judicial precedents held over a period of time: CST v. H.M. Esufali H.M. Abdulali (1970) 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. State of Kerala v. C. Velukutty (1966) , 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 60 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.
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