Today, On 6th September, The Supreme Court dismissed a Public Interest Litigation (PIL) requesting the enforcement of a compliance rating mechanism under the Central Goods and Services Tax (CGST) law. The petitioner sought the implementation of this system to assess businesses’ adherence to tax regulations. However, the court rejected the plea, noting that such issues fall within the purview of policy decisions.
New Delhi: The Supreme Court on Friday dismissed a Public Interest Litigation (PIL) that sought the enforcement of a compliance rating mechanism under the Goods and Services Tax (GST).
The Court stated that it does not wish to interfere in the administration of GST.
GST compliance rating is a score determined by authorities based on various factors, such as timely filing of monthly and annual returns, providing details of input credits used, and taxes paid.
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This mechanism helps GST payers assess their adherence to tax regulations.
The bench, led by Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra remarked,
“This is a matter for Parliament. Let us not use the PIL jurisdiction for this. The PIL is for crucial issues of human rights… the moment you see a good issue in newspapers, you say ‘chalo, file a PIL,’”
The petition, filed by Pradeep Goyal, sought enforcement of provisions under Section 149 of the Central Goods and Services Tax (CGST) Act, 2017, which mandates periodic updates of the GST compliance rating score.
The section states that the score must be communicated to the taxpayer and made available to the public in the prescribed manner.
Goyal’s lawyer, Charu Mathur, argued,
“This is a matter related to good governance,”
However, the bench, which disagreed with the petitioner, dismissed the PIL.
Section 149 of the CGST Act provides for a mechanism to update GST compliance ratings at regular intervals and to make this information accessible to both taxpayers and the public. The petition sought to ensure that these provisions strictly followed and that the compliance scores communicated to taxable persons as well as published in the public domain.
Despite the petitioner’s emphasis on the importance of compliance and transparency in the taxation process, the Supreme Court found that such matters fall under the purview of legislative decision-making and dismissed the plea.
This dismissal highlights the Court’s position on the appropriate use of PILs, emphasizing that they should not be filed for administrative or governance-related issues, but rather for more pressing concerns involving public interest and fundamental rights.