GST: Supreme Court directs State Govts and GST Council to consider Implementing DIN System to Prevent Harassment to Honest Taxpayers [Read Order]

In a significant ruling, the Supreme Court has directed the State Governments to consider the implementation of DIN system in order to prevent harassment to the honest taxpayers and advised the Central Government and GST Council to issue necessary instructions.

The ruling was delivered while considering a petition filed by a Chartered Accountant, Mr. Pradeep Goyal.

Ms. Charu Mathur appeared on behalf of the petitioner contended that by implementing a system for electronic (digital) generation of a DIN, it will usher in transparency and accountability in the indirect tax administration. It is submitted that as such the same is the Government’s objective. It is submitted that the same may prevent any abuse by the Departmental Officers of pre-dating communications and ratifying actions by authorizations subsequently made out in the files.

Shri Balbir Singh, learned ASG appeared on behalf of Union of India vehemently contended that Union of India does not dispute that by implementing a system for electronic (digital) generation of a DIN, it will bring in transparency and accountability in the indirect tax administration.

Justice M R Shah and Justice B.V. Nagarathna observed that implementing the system for electronic (digital) generation of a Document Identification Number (DIN) for all communications sent by the State Tax Officers to taxpayers and other concerned persons would be in the larger public interest and enhance good governance.

“It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance. Even the Central Government has also taken a decision and as such implemented the DIN system of Central Board of Direct Taxes and on and from 01.10.2019, as every CBDT communication will have to have a Document Identification Number (DIN). But, as on today, only two States, namely, the States of Karnataka and Kerala have implemented the system for electronic (digital) generation of a DIN in the indirect tax administration, which is laudable and to be appreciated,” the Apex Court said.

Allowing the writ petition, the Court held that “In view of the implementation of the GST and as per Article 279A of the Constitution of India, the GST Council is empowered to make recommendations to the States on any matter relating to GST. The GST Council can also issue advisories to the respective States for implementation of the DIN system, which shall be in the larger public interest and which may bring in transparency and accountability in the indirect tax administration. Therefore, we dispose of the present writ petition by directing the Union of India / GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration, which is already being implemented by the States of Karnataka and Kerala. We impress upon the concerned States to consider to implement the system for electronic (digital) generation of a DIN for all communications sent by the State Tax Officers to taxpayers and other concerned persons so as to bring in transparency and accountability in the indirect tax administration at the earliest.”

To Read the full text of the Order CLICK HERE

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