Patna High Court Issues Notice To State Over Alleged Mismanagement Of Health And Education Cess Funds

The above development came in a PIL filed in person by Advocate Shama Sinha seeking intervention of the Court to address the alleged non-utilization and mismanagement of funds collected under the Health and Education cess (formerly known as the Secondary and Higher and Education Cess) since 2008.

Chief Justice K. Vinod Chandran ordered, “The respondent-State shall file a comprehensive affidavit as to the cess collected from the date of implementation in 2008 and the expenditure made from the aforesaid cess collected.”

The Court ordered for the affidavit to be filed within a period of four weeks. The matter has now been posted on March 15.

The petition addresses the pressing issues surrounding the management, allocation, and utilization of cess funds (especially Secondary and Higher Education Cess renamed as Health and Education cess) that have been collected over a period spanning more than a decade.

The petition highlights the fundamental principle that a cess is a specific levy collected for a particular purpose, in this case, for the enhancement of education and health initiatives.

“However, despite substantial collections over the years, there have been serious deficiencies in channeling these funds for their intended objectives as the cess collected from tax payers has not been operationalized. The Madhyamik and Uchchtar Shiksha Kosh (MUSK), designed to utilize these funds for educational schemes, has not been operationalized till date as per CAG report,” the PIL states.

The petitions draws attention to multiple reports by the Comptroller and Auditor General (CAG) of India, parliamentary standing committees, and recent budget allocations, all of which underscore the underutilization, misallocation, and delays in the utilization of these cess funds.

Furthermore, the lack of transparency, accountability, and compliance with CAG recommendations in managing these funds has been emphasized in the petition.

In light of these concerns, the petitioner has prayed the Court to issue directions to the respondents to ensure the immediate and proper utilization of the accumulated funds, operationalize MUSK as per statutory obligations, establish a transparent mechanism for fund management, and adhere to CAG recommendations.

Additionally, the petitioner also sought the Court's intervention to enforce the principles of fiscal accountability, transparency, and good governance.

Appearance :

For the Petitioner/s : Ms. Shama Sinha (In Person)

For UOI : Mr. Tuhin Shankar, Advocate

For the Respondent/s : Mr. Ansay Bahadur Mathur, CGC

Case No.: Civil Writ Jurisdiction Case No.18426 of 2023

Case Title: Shama Sinha vs. The Union of India

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