Recently, the Central Board of Indirect Taxes and Customshas issued the guidelines on the procedures that have to be followed for the purpose of prosecution under the Section 132 of the Central Goods and Services Act, 2017. The guidelines has been introduced with the aim to provide clarity to the tax officials as to what procedure is to be followed for initiating prosecution under the act...
Recently, the Central Board of Indirect Taxes and Customshas issued the guidelines on the procedures that have to be followed for the purpose of prosecution under the Section 132 of the Central Goods and Services Act, 2017. The guidelines has been introduced with the aim to provide clarity to the tax officials as to what procedure is to be followed for initiating prosecution under the act and as well as to save the innocent taxpayers from being harassed by the GST officers by reducing the scope for the misuse of the provisions. For example, guidelines have clarified that whenever, a person gets exonerated during the adjudication proceedings on the merit and that there is prima facie clearance, that there has been no violation of any of the provisions of the act, the prosecution that has or has to be initiated against the person, will be withdrawn.
The guidelines contain the provision that the Pr. Commissioner or Commissioner or any other officer authorized by the said authority has the power to publish the details of the person to the public in "the deserving cases." under the Section159 of the CGST Act.
Section 159 of CGST gives the power to the Commissioner or any other person authorized by the Commissioner to publish the information regarding any person against whom any proceeding or prosecution has been initiated under the Act. Not only the information of the said person but also any information that relates to such proceeding or prosecution can be published. In order to exercise, the said power, the authority just need to satisfy the condition that the publication has been done in "public interest."
Now, the joint reading of the section and the guidelines issued, the officer can publish information regarding a person under the section 159 whenever, he is satisfied that there is a public interest and the case is such that it deserved to be published. However, neither the act nor the guidelines define as to what is the scope and nature of term "public interest" and as to what criteria is to be employed by the authority in order to determine that the case deserves to be published. All this highlights that there is a tremendous scope for the authority to arbitrarily apply the provision.
In the case of K.S. Puttaswamy v. UOI, it has been declared by the Supreme Court that every person has the right to privacy under the Article 21 of the Constitution. The right to privacy is not an absolute right and it is subjected to reasonable restrictions. For example, in the case of Mr.X v. Hospital Z, the Supreme Court has held that right to privacy is subject to interest of the public. Moreover, the Article 21 is itself not absolute, rather a person can be deprived of its right to life and personal liberty in accordance with the procedure established by law. Moreover, in the case of Maneka Gandhi v. Union ofIndia, the Apex Court has said that the procedure established by law embodies within itself the due process of law and the Article 14, 19 and 21 will have to be read together.
The term due process of law signifies that the whenever a person is deprived of its right, it must be done according to the established rules and procedures and the rules must be fair and equal. This denotes that the due process is against the application of the principle of arbitrariness in the law.
Moreover, in the case ofE.P. Royappa v. State of Tamil Nadu, J. P.N. Bhagawati, has said that the right to equality under Article 14 is antithesis to the doctrine of arbitrariness and introduced the doctrine of manifest arbitrariness as per which, the Court can declare a law, as void on the ground that it violates Article 14. A law is regarded to be arbitrary when there is no defined principles and definite rules that guide the decision-making process. Renowned JuristLon L. Fuller, has said that for establishing a rule of law, in a state, a law must be such that is publicly promulgated, clear and non-contradictory. However, in the case of arbitrariness, the public is unaware as to how, the law will be applied as it is subjected to whim of the law-maker and the law is unclear and it is subjected to be applied in a contradictory manner. Thus, the arbitrariness is against the idea of the rule of law.
Thus, a law must be fair, just, reasonable and definite in order to curtail the fundamental right guaranteed under the Article 21 of the Constitution.
Section 159 of CGST violates the right to privacy of the persons whose information get published in public interest. The section does not satisfy the principle of due process of law as there is no definite criteria as to how an authority decides that the public interest will be served by the publication of information. Furthermore, the recent requirement that section 159 must be used only in deserving cases, suffers from the malice of arbitrariness. The use of term "in deserving cases" has conferred an unfettered discretion on the executive to apply the section as per their whim as there is no basis as per which, the authority can decide that the case is deserving.
This unrestricted conferment of discretion on the executives can lead to the misuse of the law as the officers can demand bribe from the taxpayers in order to not to classify the case as a deserving one and there is also possibility that the officer can get false testimony from the taxpayer during prosecution by threatening that if the taxpayer does not cooperate with them, they will classify his case as a deserving one and will publish the information regarding him to the public.
Thus, the section 159 read with the recent guidelines does not satisfy the tests that are essential to subordinate the right to privacy of an individual to the interest of the public.
There is an imperative need for the Central Government to issue some conditions or criteria that must be fulfilled for the authority to determine as to whether a case deserves to be published or not. In the opinion of the author, there should be two conditions that must be fulfilled in order to decide that the case deserves to be published. The first criteria should be that a minimum monetary limit must be prescribed and in cases where the amount involved is above that limit, then the information can be published. The second criteria must be that the person involved must be a habitual offender.
Furthermore, the section 159 should be amended. A proviso must be introduced that whenever there is any prosecution has been initiated or there is a possibility that the prosecution can be initiated, there shall be no publication of the information regarding the taxpayer or any particular related to the proceedings. This will avert any pressure that the officers may exercise in order to get forceful testimony for the purpose of the prosecution.
Hence, the Central Government must act on curing the defects that are inherent in the application of Section 159 in order to save the honest taxpayers from the officers and to prevent any long proceedings that might arise before any court, if constitutionality of section 159 gets challenged before the court.
Views are personal