2018 (9) TMI 610 - HC - GST

Constitutional validity of section 47 of the Central Goods and Service Tax Act, 2017 - Penalty - principal contentions of the petitioners are that the Government is trying to recover penalty in the guise of late fee charges - Held that - The petitioners who are themselves active tax consultants and tax practitioners have challenged the vires of section 47 of CGST Act. They are obviously indirectly concerned with the same. There are millions of dealers who would be adversely affected by the provisions made therein. There is no reason why such an issue should be examined in a public interest petition when, the group of persons whom the statute affects does not suffer from any handicap preventing them from taking up the litigation themselves and pursuing it. Petition dismissed.

Summary

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.