A two-judge bench of the Gujarat High Court has recently dismissed a Public Interest Litigation (PIL) challenging the imposition of the late fee for the delayed filing of returns under the Goods and Services Tax (GST) regime pointing out that there is no ‘public interest’ involved in the matter.
The petitioners 1 and 2 are a practicing tax lawyer and a tax consultant respectively. Before the Court, the petitioners challenged the constitutional validity of section 47 of the Central Goods and Service Tax Act, 2017 which provides for levy of late fee for filing returns beyond the prescribed time limit.
As per section 47(1) of the Act, any registered person who fails to furnish the details of outward or inward supplies or returns by the due date, shall pay a late fee of one hundred rupees for every day of such delay subject to a maximum of five thousand rupees. It further provides that any registered person who fails to furnish the return as required under section 44 by the due date would be liable to pay a late fee of one hundred rupees for every day of delay subject to a maximum of an amount calculated at a quarter per cent of his turnover.
The petitioners urged that the Government is trying to recover penalty in the guise of late fee charges and consequently, the dealers losing their valuable right of appeals as well as right to point out that there was sufficient cause preventing them from filing the return within the due date. According to them, in the old tax regime, such charges were categorized as penal in nature.
The petitioners also pointed out various practical difficulties in filing the returns including such as malfunctioning of the official portal which often times, prevents uploading of the returns were cited.
While dismissing the petition, Justice Akil Kureshi and Justice B N Karia noted that it is not a case where PIL jurisdiction should be exercised.
“By the account of the counsel for the petitioners, there are not less than 1.30 crore dealers affected by the said provision. There is nothing to suggest that none of these affected persons can take up the cause and approach the Court of law as may be advised. Majority if not all of them would be persons with proper means who can also avail proper legal advice. This is not a case where the petitioners are espousing the cause of a weaker section of the society who, on account of hardships and handicaps inherently faced by them, are unable to knock the door of justice,” the bench said.
“In the present petition, 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. As noted, they pointed out that 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, as noted above, 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,” the bench added.
The ruling would be a setback for the taxpayers and tax practitioners for whom return filing through the GST portal is nothing less than a nightmare from the initial days of the GST– Rollout. Despite multiple deadlines and Court directions to fix issues over the log-in errors and missing data, GST is still tripping up on technical glitches.
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