Kerala High Court: Non-filing Tax Returns After Assessment Order Can Be Fatal for Assessee

The non-filing of the returns even after the receipt of the assessment order is fatal for the taxpayer, Kerala High Court ruled.

It was noted by the bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. that the same might be correct that the respondents did not furnish a formal notice as needed under section 62(1) of the Income Tax Act before finishing the assessment based on an effective ruling under the mentioned provision, however, the same fact stayed that the appellant can have received a nullification of the stated assessment order when he had furnished the return within 30 days of the receipt of the assessment order.

The best judgment assessment order passed by the assessing authority under Section 62 of the CGST/SGST Act has been contested by the petitioner. The taxpayer who was needed to file the returns under the act in their ability as a registered dealer was unable to provide the returns exceeding 6 months.

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Hence assessing authority took measures to cancel its registration under the act. The assessment on the effective ruling basis u/s 62 was indeed finished, considering that the appellant does not file any return as given under the section.

It was remarked by the single judge that even after the receipt of the assessment order u/s 62, the appellant does not claim herself with the chance to file the return as given u/s 62(2), which, if filed, can result in an automatic assessment cancellation of the assessment order passed on an effective ruling. The writ petition was dismissed in its challenge against the assessment order by the single judge who heard it.

It was argued by the taxpayer that the single judge needed to reveal that the respondents had not complied with the pre-requisite of issuing a notice before passing an order on the effective ruling u/s 62(1). Being a new venture the taxpayer did not learn of the need for the norms concerned with return filing and the consequences of not filing the returns.

It was argued by the council that the non-filing of the tax return despite passing the best judgment for the receipt of the assessment order u/s 62(2) shows that the attitude of the petitioner was one of the non-cooperation in the assessment proceedings.

It is stated that the assessment order passed u/s 62 shall required to be carried in the absence of any positive step opted via the appellant to obtain the same nullified as per section 62(2). Concerning the cancellation of registration when the appellant is not satisfied with it, it is open for the appellant to take the regulatory appellate authority against the order of cancellation of registration.

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At the time of keeping the judgment passed by the Single Bench, the court ruled that the taxpayer has only itself to blame for the predicament that it reveals itself in, as the legal provision allows enough chance for the taxpayer to ensure that an assessment is completed, as far as possible, on the grounds of the returns that has been filed by the taxpayer.