Advise States To Implement Digital DIN System : Supreme Court To Centre & GST Council

The Supreme Court has directed the GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a Document Identification Number (DIN) in the indirect tax administration.

The bench comprising Justices MR Shah and BV Nagarathna observed that the system, which is already being implemented by the States of Karnataka and Kerala, would be in the larger public interest and enhance good governance. It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance, the bench said.

The court observed thus while disposing a Public Interest Litigation filed by Chartered Accountant Pradeep Goyal.  Advocate Charu Mathur, who appeared for him, submitted that implementing this system may prevent any abuse by the Departmental Officers of pre-dating communications and ratifying actions by authorizations subsequently made out in the files. Additional Solicitor General Balbir Singh , who represented the Union of India, also agreed with this submission. 

Agreeing with this, the bench observed thus:

"It cannot be disputed that implementing the system for electronic (digital) generation of a Document Identification Number (DIN) for all communications sent by the State Tax Officers to taxpayers and other concerned persons would be in the larger public interest and enhance good governance. It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance. Even the Central Government has also taken a decision and as such implemented the DIN system of Central Board of Direct Taxes and on and from 01.10.2019, as every CBDT communication will have to have a Document Identification Number (DIN). But, as on today, only two States, namely, the States of Karnataka and Kerala have implemented the system for electronic (digital) generation of a DIN in the indirect tax administration, which is laudable and to be appreciated."

The court also noted that GST Council is empowered to make recommendations to the States on any matter relating to GST. "The GST Council can also issue advisories to the respective States for implementation of the DIN system, which shall be in the larger public interest and which may bring in transparency and accountability in the indirect tax administration", the bench observed. The court, while disposing of the writ petition, ordered thus:

"We dispose of the present writ petition by directing the Union of India / GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration, which is already being implemented by the States of Karnataka and Kerala. We impress upon the concerned States to consider to implement the system for electronic (digital) generation of a DIN for all communications sent by the State Tax Officers to taxpayers and other concerned persons so as to bring in transparency and accountability in the indirect tax administration at the earliest"

Case details

Pradeep Goyal vs Union of India | 2022 LiveLaw (SC) 654 | WP(C) 320 OF 2022 | 18 July 2022 | Justices MR Shah and BV Nagarathna

Headnotes

Goods and Service Tax - Document Identification Number (DIN) System -  Union of India / GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration - States to consider to implement the system for electronic (digital) generation of a DIN for all communications sent by the State Tax Officers to taxpayers and other concerned persons so as to bring in transparency and accountability in the indirect tax administration at the earliest -  It would be in the larger public interest and enhance good governance. (Para 6-7)

Constitution of India, 1950 ; Article 279A - GST Council is empowered to make recommendations to the States on any matter relating to GST. (Para 7)

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