Mumbai: The Bombay high court has asked the union and state governments, the 14th Finance Commission and the GST Council to file their replies in a public interest litigation (PIL) that had alleged that the central government has not been using the cess collected by it for education, environment, etc and has been using it for financing revenue deficits. The PIL has referred to Comptroller and Auditor General (CAG) reports from 2014 that have pointed out that only a small part of nearly '1.8 lakh crore collected under cess has been utilised for purposes other than what it was collected for. Cess is the tax that the government recovers over and above the normal taxes it collects.
A division bench of justices S.S. Kemkar and R.G. Ketkar was hearing the PIL filed by an assistant professor Ashrita Kotha, who is associated to a city based law college. The petition also pointed out that the Union was not returning the amount it has recovered from states for the specific purposes, as a result of which many developmental and welfare projects of states were affected. Cess forms a very miniscule portion of the taxes that are paid by individuals, like service tax, excise, customs and so on.
After hearing the petition, the bench questioned the purpose of the petition and also wanted to know whether it was challenging the GST. However, senior advocate Satish Talekar, who appeared in the matter clarified that it was to bring to light the fact that cess was collected for specific purposes but was not used for the same after being collected. He also pointed out that a part of the cess amount collected was to be returned to the state but the same was not being done. Similarly, the GST tax was also facing a similar fate and hence sought directions from the high court.
Satisfied with the submissions made by advocate Talekar, the bench ordered to issue notice to the Attorney General of India as well as other respondents within two weeks.
