The Supreme Court has dismissed a Public Interest Litigation ( PIL ) seeking the enforcement of a compliance rating mechanism under the Central Goods and Services Tax ( CGST ) Act, 2017. The Court held that it could not interfere in the administration of GST, a matter that falls under the jurisdiction of the government and legislature, not the judiciary.
The petition, filed under Article 32 by Pradeep Goyal, a Chartered Accountant sought a writ of mandamus or similar directives to the Union Government and the GST Council to take steps to implement a GST compliance rating system.
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This centralised rating mechanism would track taxpayers’ compliance across India, aligning with the “one nation, one tax” philosophy. The petition urged the GST Council to frame rules for the rating system and implement it through the Goods and Services Tax Network (GSTN), the nodal agency for GST administration.
Additionally, the petitioner requested the Court to direct states not to implement their own compliance rating systems. Instead, he argued that they should follow a centralized rating framework guided by the GST Council’s recommendations. He also urged the GST Council to promote uniformity in the rating system rather than allowing individual states to create independent mechanisms.
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However, the Supreme Court rejected the plea, stating, “We are not inclined to entertain the Writ Petition instituted under Article 32 of the Constitution of India. The Writ Petition is accordingly dismissed.” The Court emphasized that the issue was a matter for Parliament, not the judiciary, to resolve.
The petitioner argued that Section 149 of the CGST Act provides for a compliance rating system to monitor the behaviour of taxpayers. He contended that there were no clear guidelines on how this system should be implemented.
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Section 149 of the CGST Act states that every registered taxpayer may be assigned a compliance rating score by the government based on their adherence to the provisions of the law. The score is to be updated periodically and made publicly available, but the specifics of how this system should be executed have yet to be fully prescribed by the authorities.
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