PIL challenging provisions of 101st Constitutional Amendment Act relating to GST dismissed

The Patna High Court has dismissed a Public Interest Litigation (PIL) that challenged key sections of the 101st Constitutional Amendment Act, which introduced the Goods and Services Tax (GST). The petitioner argued that these sections violated the basic structure of the Constitution and that Parliament had improperly delegated its legislative powers to the GST Council. However, the court found that the petitioner lacked the necessary legal standing (locus standi) to bring the case. Additionally, the court stated that businesses transitioning to GST from VAT were not a marginalised group unable to protect their rights.

The Hon'ble Patna High Court dismissed the PIL filed in the case of Amit Pandey v. Union of India [CJWC No. 7483 of 2017 dated April 01, 2024] wherein Section 2,9,12 and 18 of the 101st Constitutional Amendment Act relating to GST were challenged on the ground that the said provisions were violative of the basic structure of the Constitution.

Facts

Amit Pandey ("the Petitioner"), a lawyer, filed a writ petition before the Hon'ble Patna High Court stating that Section 2,9,12 and 18 of the 101st Constitutional Amendment Act, 2016 violates the basic structure of the Constitution of India and, therefore, is invalid, void and unconstitutional.  Further, the ground is raised by the Petitioner that the Parliament is functioning on the recommendation of Goods and Services Tax Council ("GST Council") which is an abdication of the legislative function of the parliament.

The Department ("the Respondent") in its counter affidavit filed states that there is no abdication of the legislative function because GST Council is asked to provide recommendations based on the fact that it addresses the grievances of the taxpayer at national level as well as those issues which are unique to the particular state. The Council also addresses the issue of apportionment of tax collected between the Union and States for which law is made by the Union Parliament and not the GST Council.

Held

The Hon'ble Patna High Court in the case of CWJC No. 7483 of 2017 dismissed the PIL filed by the Petitioner by way of writ petition on the ground that the Petitioner, being a lawyer, does not have the locus based on which the writ petition could be entertained. Also, the Hon'ble High Court further held that, the dealers who were earlier registered under VAT, and have later shifted to GST by virtue of 101st Constitutional Amendment Act, cannot be considered a marginalized section, who are incapable of agitating their rights before the court of law.

OFFICIAL JUDGMENT COPY HAS BEEN ENCLOSED BELOW