Delay In Constitution Of State Consumer Welfare Fund Is A Violation Of Statute, Causing Inconvenience To Public At Large: Delhi High Court

The Delhi High Court has observed that the delay in constitution of State Consumer Welfare Fund is a violation of the statute which is causing inconvenience to the public at large.

Perusing the status report as well as the correspondence exchanged between the Delhi Government and the Centre, Justice Manmohan and Justice Navin Chawla observed thus:

"…it seems that none of the parties is cognizant of the fact that the State Consumer Welfare Fund is a statutory fund which is urgently required to be incorporated."

It added:

"Delay in its constitution is a violation of the statute and is causing inconvenience to public at large. The stop gap arrangements now suggested by GNCTD in its status report is not sanctioned by the statute and cannot be countenanced by the Court."

The Court was dealing with an application filed by one M/S Krishna Trading Company, the petitioner in the matter, under sec. 151 of the Code of Civil Procedure, 1908 seeking permission to make deposit of Rs.14,01,705 with the Central Consumer Welfare Fund.

The Court was given an assurance that the State Consumer Welfare Fund shall be functional and operational within a period of four weeks.

Accordingly, the matter was adjourned to February 22.

The bench had earlier issued notice to the Chief Secretary of the Delhi Government after expressing surprise over the fact that it does not have a State Consumer Welfare Fund till date.

"Surprised That Delhi Govt Does Not Have A State Consumer Welfare Fund Till Date": High Court Issues Notice To Chief Secretary

It was submitted by the applicant that in terms of the order dated 18th August, 2021 of the High Court, the company was directed to deposit the profiteering amount in the ratio of 50:50 with the Central Consumer Welfare Fund as well as the State Consumer Welfare Fund in terms of Rule 133(3)(c) of the CGST Rules, 2017.

Advocate Karan Sachdev appearing for the applicant had submitted that since the Consumer Welfare Fund of the Delhi Government was not operational in the State yet, the subsequent instalments made to the Central Fund were not accepted on the ground of non-payment towards the State Consumer Welfare Fund.

He had pointed out that the first and second instalment deposited with the Central Consumer Welfare were however accepted.

The respondent, on the other hand, submitted that on the instructions received from the Deputy Controller of Accounts, Trade and Taxes Department, it was stated that the amount meant for the Consumer Welfare Fund Delhi may be obtained from the registered Firm by way of Demand Draft in favour of the Commissioner, Trade & Taxes Department, Government of NCT of Delhi.

Case Title: M/S KRISHNA TRADING COMPANY v. UNION OF INDIA & ORS.

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