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The Bombay High Court on Monday issued notices to the Comptroller and Auditor General of India, Union of India, the 14th Finance Commission, the Goods and Service Tax Council, the Attorney General, and the State government, among others, in a plea filed by one Ashrita Prasad Kotha, a law professor at Jindal Global Law School challenging the constitutional validity of GST(Compensation to States) Act 2017 and 15 other Acts.
The bench consisting of Justice SS Kemkar and Justice RG Ketkar issued notices to all the above authorities impleaded as respondents in the PIL. The PIL contended that cess is a tax in addition to existing taxes levied for specific purposes, the proceeds of which are to be utilised only for specific purposes. The proceeds of cesses collected by the Central government are neither to be shared with the State and nor merged with the CFI.
According to the petition, cess taxes form approximately 10.79 per cent of the total tax revenues i.e. Rs 1,837,673,000,000, which is evident from the ‘Tax Revenue’ statement contained in the Receipt Budget 2017-2018 issued by the Ministry of Finance, Government of India. The cess taxes which were projected at around 2% in 1999-2000, rose to 7% in 2006-2007 and 10.79% in 2016-2017. PIL also states that the Centre is generating revenue in the name of cesses so that it can keep the entire revenue rather than share it with the States. The petition said that such a trend is not only disturbing but would pose a serious threat to the scheme of cooperative federalism adopted under the Constitution of India.
The petitioner also alleged that in several cases, the amount collected by way of cesses is diverted for other purposes including financing revenue deficits, advertisements and for general purposes which is impermissible under the scheme of Constitution.
Senior advocate SB Talekar is appearing for the petitioner in the concerned matter. As, the court has not allotted a specific date for this case, hence, it will come up for hearing as per the CMIS date.
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