Supreme Court dismissed a plea challenging provisions of GST Act and held that constitutional validity can be challenged before the High Court

Supreme Court dismissed a plea challenging provisions of GST Act and held that constitutional validity can be challenged before the High Court

The Supreme Court of India (SC) has dismissed a writ petition wherein the constitutional validity of various provisions of the Central Goods and Service Tax Act (CGST Act) was challenged

Mr. Devendra Dwivedi (petitioner) filed a writ petition before the SC under Article 32 of the Constitution of India against the Union of India & Ors. (respondent). The writ petition was filed challenging various provisions of the CGST Act and seeking a declaration of being unconstitutional.

The petitioner contended that Sections 69 and 132 of Goods and Services Tax Act (GST Act) are ultra vires to Article 21 of the Constitution of India; Section 70(1) of the said Act is ultra vires to Article 20(3) of the Constitution; Section 67(1) and Section 69 of the CGST Act are ultra vires and violative of the principles of natural justice.

The petitioner contended that the above-mentioned provisions are unconstitutional as it won't provide for recording of reasons to believe in writing, unlike other statutes such as the Prevention of Money Laundering Act, 2002.

The petitioner further submitted that Section 137 of the CGST Act 2017 is contrary to the settled principles of law, which provides that there can be no fastening of vicarious liability for a criminal offense requiring mens rea, without there being an active role being proved by the prosecution.

He further challenged the validity of Section 135 of CGST Act, 2017 on the basis that it requires the accused to disprove the reverse burden of proof not by preponderance of probability but beyond a reasonable doubt.

Section 67 deals with the power of inspection, search and seizure, Section 69 with power to arrest, Section 70 with power to summon persons to give evidence and produce documents, Section 132 with punishment for certain offenses, Section 135 with Presumption of culpable mental state, Section 137 with offences by companies.

The SC observed that though the jurisdiction under Article 32 of the Constitution of India is a salutary constitutional safeguard that aims to protect the fundamental rights of citizens. The jurisdiction under Article 32 shall be exercised in a particular case is a matter for the 'calibrated exercise of judicial discretion'.

The bench headed by Justice DY Chandrachud stated, "We are of the view that it would be appropriate to relegate the petitioner to the remedy of a petition under Article 226 of the Constitution of India so that this Court has the benefit of the considered view of the jurisdictional High Court."

The bench also comprised of Justices Indira Banerjee and Sanjiv Khanna and they noted that several other petitions which were instituted under Article 32 of the Constitution have eventually been withdrawn, and some were dismissed.

The SC dismissed the writ petition and stated that the petitioner can challenge the constitutional validity of said provisions of the CGST Act before the High Court.

It stated that the grievance regarding the conduct of the investigation can be appropriately addressed by the HC either in the exercise of the jurisdiction under Article 226 of the Constitution of India or under Section 482 or other provisions of the Code of Criminal Procedure.