Tvl.Sri Dhanalakshmi Earth Movers vs. The Deputy State Tax Officer-1

Facts

The petitioner, Tvl. Sri Dhanalakshmi Earth Movers, filed a writ petition challenging an order dated 21.01.2025 passed by the respondent, The Deputy State Tax Officer-2, Thirumangalam Assessment Circle, under Section 62 of the TNGST Act, 2017. This order was a best assessment order for the month of September 2024, issued due to the petitioner's failure to file GST returns. The petitioner argued that even if returns are filed late, the assessment order should not subsist, relying on the proviso to Section 62 which allows filing within 60 days beyond the initial due date, and that this period is directory. The respondent contended that the proviso specifies an outer condonable limit and is not directory, and that an appeal against a similar interpretation is pending before the Division Bench.

Held

The Court held that the time period stipulated in the proviso to Section 62 of the TNGST Act, 2017, for filing returns is directory. The Court noted that it has consistently taken this view in previous judgments. Therefore, once a return is filed, even belatedly, the assessment order passed under Section 62 should not survive. The Court found no compelling reasons to differ from the binding precedents cited by the petitioner. Accordingly, the impugned order dated 21.01.2025 was quashed. The Court directed that the matter should be considered appropriately by the respondent while making further assessment for the year. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the time period stipulated in the proviso to Section 62 of the TNGST Act, 2017, for filing returns even after the initial due date, is directory or mandatory? Petitioner's arguments: The petitioner contended that the time period for filing returns, even beyond the initial due date as per the proviso to Section 62, is directory. They argued that the assessment under Section 62 is provisional and can be reconciled during the annual assessment. The petitioner relied on judgments from this Court in Tvl.T.Vijayakumar V. The Deputy State Tax Officer, Nagercoil, The Comfort Shoe Components V. Assistant Commissioner, Ambur, and M/s.Om Ganapathi Cranes and Earth Movers V. The Deputy State Officer-II cum The Deputy Commercial Tax Officer, Tindivanam. Respondent's arguments: The respondent argued that the proviso to Section 62 categorically contains an outer condonable limit and therefore, it cannot be held to be directory. They stated that the department has filed an appeal before the Division Bench against a similar interpretation, which is pending at the condonation of delay stage, and thus this Court need not accept the petitioner's interpretation.