Analysis of the impact of recent GST guidelines on Article 159 CGST
Recently, the Central Excise and Customs Board issued guidelines on the procedures to be followed for prosecution under Section 132 of the Central Goods and Services Act 2017. The guidelines were introduced for the purpose of providing clarity to tax officials as to the proper procedure for initiating prosecution under the law and to prevent innocent taxpayers from being harassed by GST officials by reducing opportunities for misuse of the provisions . For example, guidelines have clarified that whenever a person is exonerated in the course of the arbitration on the merits and there is a prima facie clearance, that there has been no violation of the ‘one of the provisions of the law, the prosecution that must or must be initiated against the person, will be withdrawn.
The guidelines contain the provision that the Prof. Commissioner or Commissioner or any other officer authorized by said authority has the power to publish the details of the person to the public in “deserving cases.” under article 159 of the CGST law.
Section 159 of the CGST empowers the Commissioner or any other person authorized by the Commissioner to publish information about any person against whom proceedings or proceedings have been instituted under the law. Not only the information of said person but also any information relating to this procedure or lawsuit may be published. To exercise the said power, it is sufficient for the authority to satisfy the condition that the publication was made in “public interest.”
Now, on reading the section together with the directives issued, the officer may publish information about a person under section 159 whenever he is satisfied that there is a public interest and that the case is such that it deserved to be published. However, neither the law nor the guidelines define the scope and nature of the term “public interest” and the criteria to be used by the authority to determine whether the case merits publication. All of this highlights that there is enormous leeway for the authority to arbitrarily apply the provision.
In KS Puttaswamy v. UOI, the Supreme Court said that everyone has the right to privacy under Section 21 of the Constitution. The right to privacy is not an absolute right and is subject to reasonable restrictions. For example, in Mr.X v. Hospital Z, the Supreme Court ruled that the right to privacy is subordinate to the public interest. Moreover, Article 21 is not itself absolute, but a person may be deprived of his right to life and personal liberty in accordance with the procedure established by law. Additionally, in Maneka Gandhi v. Union of India, the Supreme Court said that the procedure established by law in itself embodies due process and Articles 14, 19 and 21 should be read together.
Due process means that whenever a person is deprived of their rights, it must be done according to established rules and procedures and that the rules must be fair and equal. This indicates that due process goes against the application of the principle of arbitrariness in the law.
Moreover, in the case of EP Royappa c. State of Tamil Nadu, JPN Bhagawati, declared that the right to equality under Article 14 is the antithesis of the doctrine of arbitrariness and introduced the doctrine of manifest arbitrariness according to which, the Court may declare a law void on the grounds that it violates Article 14. A law is considered arbitrary when there are no defined principles and clear rules that guide the decision-making process. Noted jurist Lon L. Fuller said that to establish the rule of law in a state, a law must be publicly enacted, clear and not contradictory. However, in case of arbitrariness, the public does not know how, the law will be applied because it is subject to the whim of the legislator and the law is not clear and it is subject to contradictory application. Thus, arbitrariness runs counter to the idea of the rule of law.
Thus, a law must be fair, just, reasonable and final in order to restrict the fundamental right guaranteed by Article 21 of the Constitution.
Article 159 of the CGST violates the right to privacy of persons whose information is published in the public interest. The article does not satisfy the principle of due process of law because there are no precise criteria as to how an authority decides that the public interest will be served by the publication of information. Moreover, the recent requirement that Article 159 should only be used in deserving cases suffers from the malevolence of arbitrariness. The use of the term “in deserving cases” conferred absolute discretion on the executive to apply the article according to its whim, since there is no basis upon which, the authority can decide that the case is deserving.
This unrestricted grant of discretion to officers may lead to abuse of the law, as officers may demand bribes from taxpayers so as not to classify the case as deserving and it is also possible that the officer obtains false testimony from the taxpayer during the prosecution by threatening that if he does not cooperate with them, they will classify his case as deserving and release the information about him to the public.
Thus, section 159 read with the recent guidelines does not meet the necessary criteria to subordinate the right to privacy of an individual to the interest of the public.
It is imperative that the central government issues certain conditions or criteria that must be met for the authority to determine whether a case deserves to be published or not. In the author’s opinion, there should be two conditions to be met in order to decide that the case is worthy of publication. The first criterion should be that a minimum monetary limit must be prescribed and in cases where the amount involved is above this limit, then the information can be published. The second criterion must be that the person involved must be a repeat offender.
Also, section 159 should be amended. A provision should be introduced that whenever proceedings have been commenced or there is a possibility that proceedings may be commenced, there shall be no publication of information relating to the taxpayer or any individual connected with the procedure. This will avoid any pressure officers may exert to obtain strong evidence for the purposes of the prosecution.
Therefore, the central government must act to remedy the flaws inherent in the application of Section 159 in order to save honest taxpayers from officers and prevent any lengthy proceedings that may arise in any court, if the constitutionality of section 159 is disputed. before the tribunal.
Views are personal