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Analyzing the Impact of Recent GST Guidelines on Section 159 CGST

The Central Board of Indirect Taxes and Customs has released recommendations on the processes that must be followed to prosecute under Section 132 of the Central Goods and Services Act, 2017. The rules were created to provide clarity to tax authorities on the procedure for beginning prosecution under the act, as well as to save innocent taxpayers from harassment by GST inspectors by eliminating the opportunity for misuse of the provisions.

Guidelines, for example, have clarified that whenever a person is exonerated during the adjudication proceedings on the merits and 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of any of the provisions of the act, the prosecution that has or has to be initiated against the person will be withdrawn.

Under Section 159 of the CGST Act, the Pr. Commissioner or Commissioner, or any other official authorized by the said authority, can disclose the data of the individual to the public in “deserving instances.”

Section 159 of the CGST empowers the Commissioner or any other person authorized by the Commissioner to disclose information about any individual against whom any process or prosecution has been launched under the Act. Not only the information of the stated individual but also any information relating to such procedure or prosecution may be disclosed. To use the power, the authority must only satisfy the criteria that the publishing was done in the “public interest.”

Following a combined reading of the provision and the recommendations offered, the officer can now disclose information about a person under Section 159 anytime he is convinced that there is a public interest and the situation merits publication. However, neither the act nor the guidelines clarify the extent and nature of the word “public interest” or the criteria to be used by the authority in determining whether the case ought to be publicized. All of this demonstrates the authority’s enormous latitude in applying the clause arbitrarily.

The Supreme Court ruled in the matter of K.S. Puttaswamy v. UOI that everyone has a right to privacy under Article 21 of the Constitution. The right to privacy is not absolute and is subject to reasonable limits. In the case of Mr.X v. Hospital Z, for example, the Supreme Court ruled that the right to privacy is subject to the public’s interest. Furthermore, Article 21 is not absolute; rather, a person’s right to life and personal liberty might be violated in line with the legal system. Furthermore, in the case of Maneka Gandhi v. Union of India, the Supreme Court stated that the legal method includes a due process of law and that Articles 14, 19, and 21 must be interpreted together.

The word due process of law means that anytime a person’s right is violated, it must be done by the established rules and processes, and the rules must be fair and equal. This means that due process is opposed to the application of the concept of arbitrariness in the law.

Furthermore, in the case of E.P. Royappa v. State of Tamil Nadu, J. P.N. Bhagawati stated that the right to equality under Article 14 is opposed to the doctrine of arbitrariness and introduced the doctrine of manifest arbitrariness, under which the Court can declare a law void because it violates Article 14. When there are no clear principles and definite norms that guide the decision-making process, a law is considered arbitrary. According to renowned JuristLon L. Fuller, to create a rule of law in a state, a law must be publicly publicized, explicit, and non-contradictory. However, in the event of arbitrariness, the public is uninformed of how the law will be implemented since it is susceptible to the whim of the lawmaker, the legislation is vague, and it is subject to being interpreted in a contradictory manner. As a result, the arbitrariness violates the concept of the rule of law.

To limit the basic right provided by Article 21 of the Constitution, legislation must be fair, just, reasonable, and definite.

Section 159 of the CGST infringes on the right to privacy of individuals whose personal information is disseminated in the public interest. The clause violates the principle of due process of law since there are no specific criteria for how an authority determines that the publishing of material would serve the public interest. Furthermore, the subsequent restriction that Section 159 be applied only in worthy circumstances is tainted by arbitrariness. The usage of the phrase “in worthy instances” has given the executive unrestricted leeway to interpret the provision as they see fit because there is no foundation on which the authority may judge that the case is deserving.

This unrestricted delegation of authority to executives may result in the misapplication of the law, as officers may demand bribes from taxpayers to avoid classifying the case as deserving, and there is also the possibility that officers may obtain false testimony from taxpayers during prosecution by threatening that if the taxpayer does not cooperate with them, they will classify his case as deserving and will publish information about him to the public.

As a result, section 159, when read in conjunction with the current recommendations, fails to meet the criteria required to subordinate an individual’s right to privacy to the public’s interest.
There is an urgent need for the Central Government to issue some rules or criteria that must be met for the authority to determine as an author, there should be two conditions that must be met to conclude that the case deserves to be published. The first criterion should be a minimum monetary limit, and if the amount involved exceeds that level, the information can be released. The second need is that the individual is implicated to be a habitual offender. The second need is that the individual is implicated to be a habitual offender.

Section 159 should be changed as well. A provision must be included that prohibits the publishing of information on the taxpayer or any particulars relating to the proceedings if a prosecution has been commenced or there is a likelihood that a prosecution will be initiated. This will prevent any pressure from being applied by the cops in order to get aggressive testimony for the purpose of prosecution.

As a result, the Central Government must act to correct the flaws in the implementation of Section 159 in order to protect honest taxpayers from the officials and to avoid any lengthy processes before any court if the validity of Section 159 is challenged.

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