The Supreme Court on Friday stayed the orders of high courts of Kerala and Allahabad to defer the recovery process of all taxes till April 6 in light of the coronavirus pandemic. The Centre argued that the curbs would severely impact the monthly revenue collections of the Union government to the tune of Rs 2 lakh crore. A fall in revenue collections will hurt the Central government’s fight against coronavirus, it added.
With near state-wide shutdowns and lives affected across the spectrum, the high court orders on Thursday restrained the Centre and banks from recovering revenue dues such as the GST and income tax till April 6. In response, the Centre took the orders to the Supreme Court and pushed for an urgent hearing on Friday.
A Supreme Court bench comprising justices A.M. Khanwilkar, Vineet Saran and Krishna Murari passed the interim order in favour of the Centre. Further, the court stayed all proceedings regarding the same before the high courts, reported Bar and Bench. The high courts had passed the orders to avoid piling up of litigations in courts during tax collections. No coercive methods should be used against any individual to collect taxes, both the Kerala and Allahabad high courts had ordered.
However, earlier in the day, appearing for the Centre, Solicitor General Tushar Mehta said there was no need for the high courts to pass orders as online payment of taxes was already in place. The high court orders would effectively stop people from paying taxes, Mehta argued, adding that high courts cannot pass blanket orders. It was submitted that the restraint on recovery will put the government to prejudice ahead of the closure of the financial year on March 31. “Even people who volunteer to pay the taxes and file returns will stop doing so,” LiveLaw reported citing Mehta’s arguments before the SC bench.
The solicitor general assured the court that the Centre was aware of the difficulties faced by the common man. “The Centre is coming up with a mechanism to address the issue without causing hardship in the present circumstances,” Mehta submitted in the SC.