Constitutional Challenge to GST Provisions to be addressed before High Court: Supreme Court

SC: Deprivation of property right only through procedure established by Law

CASE: Devendra Dwivedi Vs. Union of India & Ors.

CITATION: [Writ Petition(s)(Criminal) No(s).272/2020] 

CORAM: Hon’ble Justice D.Y. Chandrachud, Hon’ble Justice Indira Banerjee and Hon’ble Justice Sanjiv Khanna

The Supreme Court did not entertain a writ petition which challenged the constitutional validity of certain provisions of the Central Goods and Services Act, 2017.

The court instead held the view that it would be beneficial that the petitioner seek remedy under Article 226 so the court has the chance to consider the view of the jurisdictional High Court.

The court observed that although Article 32 is a constitutional safeguard to protect the Fundamental Rights of the citizens, it is judicial discretion whether the recourse to the jurisdiction of Article 32 will be entertained in a particular case.

The constitutional validity of the following provisions was challenged:

  • Section 69 and 132 of the CGST Act are ultra vires to Article 21 of the Constitution.
  • Section 70(1) of the CGST Act is ultra-vires to Article 20(3) of the Constitution.
  • Section 67(1) and 69 of CGST Act are violative of the principles of natural justice.
  • Section 137 of CGST Act is against the settled principles of law, which state that there cannot be a fastening of vicarious liability for a criminal offence that requires mens rea, without the presence of an active-role being proved by the prosecution.
  • Section 135 of CGST Act is unconstitutional because it needs the accused to disprove reverse burden of proof beyond reasonable doubt.

The bench observed that the petitioner has a remedy under Article 226 of the Constitution to challenge the constitutional validity of the provisions in question. Although the counsel for the petitioner invoked Article 21, the petition is challenging revenue legislation. There are well-established procedures in criminal law and the revenue legislations have their internal discipline as well. 

“Short-circuiting this should not become a ruse for flooding this court with petitions which can, should, and must be addressed before the competent fora. Hence we are of the view that it would be appropriate to relegate the petitioner to the remedy of a petition under Article 226 so that this Court has the benefit of the considered view of the jurisdictional High Court.”

The court dismissed the petition with the clarification that they had left it open for the petitioners to seek remedies available in law.