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 under public interest litigation. The Court emphasized affected parties could pursue legal action individually and highlighted the limited scope of public interest jurisdiction, requiring alignment with specific criteria for intervention.

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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 Act
The 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.

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