Yearender 2022: Supreme Court's five key judgments of 2022

The constitution mandates that the GST Council will promote harmony and consistency in taxation between the states and the Union. The recommendations of the Council have to be passed by a three-fourths majority of the members present and voting. The Union government has a third of the votes, while the states together have two-thirds of the total votes in the council.

Despite article 279A of the constitution clearly using the word "recommendation" while describing the functions of the GST Council, states implemented all of its recommendations to maintain consistency with other states.

In May, a three-judge bench of the SC led by Justice DY Chandrachud held the Council's recommendations only had a persuasive value and were not binding on the Union and states. The court further held that if the recommendations were viewed as binding edicts, it would be harmful to the fiscal federalism of the country, where both the Union and the states had equal power to legislate on GST.

The court held the Union government while exercising its rule-making powers under the provisions of the Central GST Act and the Integrated GST Act, was bound by the recommendations of the council. However, that did not mean all the recommendations of the Council were binding on the legislature's power to enact primary legislations.

The SC judgment came on an appeal against the Gujarat High Court's decision regarding the levy of ocean freight tax under the Integrated GST Act, 2017. The court had quashed a 2017 notification of the government which provided for 5 percent IGST to be levied on the transport of goods in a vessel. The SC upheld the HC's judgment.

2: Individuals and vaccination:

In a writ petition seeking disclosure of data related to COVID vaccine trials and prevention of action against persons who are not vaccinated, the SC held that an individual could not be forced to be vaccinated against the coronavirus.

A bench led by Justice Nageswara Rao further held that the bodily autonomy of an individual includes a person's right to refuse to undergo any medical treatment. The court noted that persons who are not inclined to be vaccinated owing to personal beliefs or preferences could avoid vaccination.

However, if there is a likelihood of the unvaccinated person spreading the infection to other people or contributing to the mutation of the virus, or burdening of the public health infrastructure, the government may regulate such public health concerns by imposing certain limitations on individual rights.

3: Powers of the ED:

The powers of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA), 2002, were challenged in the SC on the ground that it had wide powers to arrest and seize property without being compliant with the Criminal Procedure Code, 1973, (CrPC).

The writ petitions also challenged the stringent conditions for obtaining bail under PMLA. They claimed that the legislation required the accused to prove that they were not guilty before they could receive bail.

In July, a bench led by Justice Khanwilkar dismissed the challenges and held that since the ED did not have the powers of the police, it did not have to follow the procedures of the police under CrPc. The court held that PMLA was special legislation that provided a special mechanism for the inquiry and investigation of money laundering.

Regarding the admissibility of statements recorded by ED officers during investigation in judicial proceedings, the court held that the authorities were not police officers per the PMLA. Consequently, persons accused of money laundering could not claim protection from self-incrimination under Article 20(3) of the constitution, if their statements were used against them.

The court held that the reverse burden of proof to obtain bail was justified in case of a crime such as money laundering. The bench noted that a person charged with money laundering would get the opportunity to disclose information and evidence to rebut the legal presumption in respect of facts accusation during the proceedings before the authority.

Regarding the attachment of properties of persons convicted under PMLA, the court held that the objective of the act was to attach and confiscate proceeds of crime to combat the evil of money laundering.

4: EWS reservation:

In 2019, the Union government introduced reservations for economically weaker sections (EWS). States were given the power to provide up to 10 percent reservation in educational institutions and public employment solely on the basis of economic criteria. The EWS reservation, however, excluded those who were already covered by other reservations, such as Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs).

In November, a constitution bench of the SC led by the then CJI, UU Lalit, upheld the reservation for EWS by a 3:2 majority. The majority held that reservation creates a new class of beneficiaries within the general category and upheld economic considerations as the sole criteria for providing the reservation.

They held that reservation for EWS did not violate the basic structure of the constitution as states had an obligation towards social and economic equality. It was also held that the reservation did not violate the right to equality as it created a separate category for people belonging to economically weaker sections, without affecting the reservations provided to SCs, STs, and OBCs.

On the exclusion of SCs, STs, and OBCs from EWS, the majority held that reservations already existed for these classes, and providing EWS reservations to them would give them an extra advantage.

CJI Lalit and Justice Ravindra Bhat, both of whom dissented, held that the exclusion of SCs, STs, and OBCs from EWS reservations violated the right to equality. The dissenting judges held that as many of the EWS in India belonged to backward classes, it would not be right to presume that these socially and educationally depressed classes would have an advantage.

The dissenting judges also noted that EWS reservation would allow the government to exceed the 50 percent limit on reservations, which is a well-settled law.

5: Nod to FCRA amendments:

In 2020, the Union government amended certain provisions of the Foreign Contributions (Regulation) Act, 2010, (FCRA). The amendments barred the transfer of foreign contributions received by one organisation or individual to others. It mandated all foreign contributions should be received at the main branch of the State Bank of India in New Delhi, besides other such restrictions.

The amendments were challenged in the SC by non-governmental organisations and charitable organisations, contending that the amendments violated their fundamental rights guaranteed under the constitution. The organisations argued the amendments would be against the objectives of the act as they impose excessive restrictions on the 'right to receive foreign funding'.

An SC bench led by Justice AM Khanwilkar dismissed the challenges to the amendments. The court held that the right to receive donations was not a fundamental right and hence it could not be argued that the amendments imposed excessive restrictions on the right to receive foreign contributions. The bench further held that the amendments were introduced to provide a regulatory framework and not to prohibit the receipt of foreign contributions.