Gaurav Yadav & Anr. vs. Union Of INDIA & Ors.

Held

The Court held that it would be extremely slow to interfere with the policy decisions of the government regarding what items should be classified as essential commodities under the Essential Commodities Act, 1955, unless such a decision is manifestly unreasonable or arbitrary. The Court noted that the decision not to extend the notification was based on the government's assessment of the availability and price of masks and sanitizers, supported by an Office Memorandum dated July 1, 2020. The petitioners failed to provide any material to demonstrate that this basis was erroneous. The Court also observed that the only regulation in place during the period of coverage was regarding the price, and contentions about quality regulation were not relevant to the relief sought. Regarding the GST rate, the Court held that tax rates cannot be challenged unless they are confiscatory, and the petitioners had not made any arguments to this effect. Therefore, the Court found no reason to issue a writ of mandamus for either prayer. The Additional Solicitor General assured the court that the respondents would monitor the situation and take remedial action if required. The writ petition was dismissed.

Facts

The petitioners filed a public interest litigation seeking a writ of mandamus directing the Union of India to extend notifications dated 12/03/2020 and 21/03/2020, which classified masks and sanitizers as essential commodities and fixed their retail prices. They also prayed for a reduction in the GST rate on alcohol-based sanitizers from 18% to 5% or 12%. The notifications classifying masks and sanitizers as essential commodities were initially in force until June 30, 2020. The respondents did not extend these notifications, citing that the commodities were readily available and no longer required price control. The petitioners were aggrieved by this non-extension and the existing GST rate.

Key Issues

1. Whether the Court should issue a writ of mandamus directing the respondents to extend the notifications classifying masks and sanitizers as essential commodities under the Essential Commodities Act, 1955, and fix their retail prices? 2. Whether the Court should issue a writ of mandamus directing the respondents to reduce the GST rate on alcohol-based sanitizers from 18% to 5% or 12%? Petitioner's arguments: The petitioners argued that in the absence of regulation, manufacturers and traders might exploit the situation, even though masks and sanitizers are now generally available. They sought judicial intervention to ensure continued price regulation and a reduced GST rate for these essential items during the pandemic. Revenue/State's arguments: The respondents contended that the decision to include or exclude items under the Essential Commodities Act, 1955, is a policy decision of the government, which the Court should not interfere with unless it is manifestly unreasonable or arbitrary. They stated that the decision not to extend the notification was based on the assessment that masks and sanitizers were easily available and did not require price control. Regarding GST, they argued that tax rates cannot be challenged in court unless they are confiscatory in nature, and the petitioners had not demonstrated this.