2018 (9) TMI 610 - HC - GST

High Court rejects petition on CGST Act, emphasizes limited scope of public interest litigation

The High Court dismissed the petition challenging the constitutional validity of section 47 of the CGST Act, stating it was not suitable for consideration ... Maintainability of public interest litigation - Public interest jurisdiction - Indirect interest and locus of petitionersMaintainability of public interest litigation - Public interest jurisdiction - Whether a public interest petition challenging the constitutional validity of section 47 of the Central Goods and Services Tax Act, 2017 is maintainable. - HELD THAT: - The Court held that the petition, filed as a public interest litigation by two tax practitioners challenging section 47 (late fee) of the CGST Act, was not an appropriate matter for exercise of PIL jurisdiction. The petitioners are actively engaged in the profession on taxation matters and thus have an indirect personal interest; further, the provision affects a very large class of dealers (stated to be about 1.30 crore) who are not shown to be incapable of approaching the courts themselves or lacking means to obtain legal advice. The Court observed that while public interest jurisdiction has been expanded, it remains principally concerned with matters of public accountability, environmental issues and the like, and is not to be used where the affected class can themselves litigate. Reliance was placed on the principle in State of Uttaranchal v. Balwant Singh Chaufal as illustrating limits to PIL use. In these circumstances the Court declined to entertain the constitutional challenge to section 47 by way of PIL and dismissed the petition. [Paras 2, 3, 4]Petition dismissed; PIL not maintainable to challenge section 47 of the CGST Act in the facts of this case.Final Conclusion: The High Court dismissed the public interest petition challenging section 47 of the CGST Act on the ground that the matter is not appropriate for PIL jurisdiction and that the petitioners, being tax practitioners with indirect interest and the affected class being capable of litigating, cannot invoke public interest jurisdiction for this challenge. Issues: Challenge to constitutional validity of section 47 of the Central Goods and Service Tax Act, 2017 (CGST) pertaining to late fee charges. Jurisdiction of Public Interest Litigation (PIL) in High Court.Analysis:Issue 1: Challenge to Constitutional Validity of Section 47 of CGST ActThe petitioners, a practicing advocate and a tax consultant, challenged the constitutional validity of section 47 of the CGST Act, which deals with late fee charges for filing returns beyond the prescribed time limit. The petitioners argued that the late fee charges imposed under this section were akin to penalties, depriving dealers of their right to appeal and explain reasons for late filing. They highlighted practical difficulties in filing returns, such as portal malfunctions. The petitioners contended that previous laws categorized such charges as penal in nature.Issue 2: Jurisdiction of Public Interest Litigation (PIL)The High Court declined to entertain the petition categorized as a public interest litigation. The Court opined that PIL jurisdiction should not be exercised in this case, as there was no indication that the affected dealers, numbering around 1.30 crore, could not approach the court individually. The Court noted that the petitioners, being tax consultants themselves, were indirectly connected to the issue at hand. It was emphasized that public interest jurisdiction typically extends to environmental issues and matters of public accountability. The Court cited a Supreme Court decision to support this view.Conclusion:The High Court dismissed the petition challenging the constitutional validity of section 47 of the CGST Act, stating that it was not suitable for consideration under public interest litigation. The Court highlighted that the affected parties were not hindered from pursuing legal action individually. The judgment underscored the limited scope of public interest jurisdiction, emphasizing the need for issues to align with specific criteria for intervention.