2022 (8) TMI 216 - SC - GST

Union of India directed to issue advisory for electronic Document Identification Number system implementation across states

The SC disposed of the writ petition by directing the Union of India/GST Council to issue advisory/instructions/recommendations to respective states ... Document Identification Number (DIN) - transparency and accountability in indirect tax administration - GST Council recommendations under Article 279A of the Constitution - advisory to States for implementation of administrative measuresDocument Identification Number (DIN) - transparency and accountability in indirect tax administration - GST Council recommendations under Article 279A of the Constitution - advisory to States for implementation of administrative measures - Direction to Union of India / GST Council to issue advisory/recommendations to States for implementation of an electronic (digital) generation system of Document Identification Numbers (DIN) for communications of State Tax Officers and encouragement to States to implement the DIN system. - HELD THAT: - The Court observed that implementation of an electronic DIN system for communications issued by tax authorities would promote transparency and accountability in indirect tax administration and is in the larger public interest. It noted that the Central Government had already implemented a DIN system for CBDT communications from 01.10.2019 and that two States (Karnataka and Kerala) have implemented similar systems. Given the GST Council's constitutional power to make recommendations to States under Article 279A, the Court held that the appropriate course is to direct the Union of India and the GST Council to issue advisories, instructions or recommendations to the States to consider and implement a DIN system for all communications from State Tax Officers to taxpayers and other concerned persons. The Court therefore disposed of the petition by issuing that direction and by impressing upon the States to consider implementing the system at the earliest, while directing registrarial circulation of the order to Chief Secretaries of the States. [Paras 6, 7]Union of India / GST Council directed to issue advisory/instructions/recommendations to the States for implementation of an electronic DIN system; States impressed to consider implementation expeditiously; writ petition disposed.Final Conclusion: The writ petition is disposed by directing the Union of India and the GST Council to issue advisories/recommendations to the States for implementing an electronic Document Identification Number system to enhance transparency and accountability in indirect tax administration, and the States are urged to consider implementation promptly; registry to send copy of the order to Chief Secretaries of States. Issues:Implementation of electronic Document Identification Number (DIN) system for tax communications, GST Council's role in recommending DIN system implementation by states.Analysis:The petitioner, a Chartered Accountant, filed a Writ Petition under Article 32 seeking the implementation of an electronic DIN system for tax communications to enhance transparency and accountability in indirect tax administration. The petitioner urged the GST Council to consider and decide on implementing the DIN system across all states. The petitioner highlighted the importance of preventing abuse by Departmental Officers through pre-dating communications and ratifying actions. Reference was made to the Prime Minister's directive to ensure honest taxpayers are not harassed, leading to the Central Government's decision to implement the DIN system for CBDT communications.The respondent, representing the Union of India, acknowledged the benefits of implementing an electronic DIN system for tax communications to enhance transparency and accountability. It was noted that the Central Government had already implemented the DIN system for CBDT communications. However, the responsibility for implementing the DIN system for state tax communications lies with the respective states. The respondent highlighted that the GST Council has the authority to recommend and advise states on matters related to GST, including the implementation of the DIN system.The Supreme Court recognized the public interest and governance benefits of implementing the electronic DIN system for tax communications. While appreciating the efforts of Karnataka and Kerala for already implementing the system, the Court emphasized the importance of extending this practice nationwide. The Court directed the Union of India and the GST Council to issue advisories to states for implementing the electronic DIN system, emphasizing transparency and accountability in indirect tax administration. The concerned states were urged to consider implementing the DIN system promptly to enhance governance. The Court disposed of the writ petition, instructing the Registry to send a copy of the order to the Chief Secretary of all respondent states for necessary action.