SC stays Kerala & Allahabad High Court orders restraining tax collection for two weeks

The Supreme Court on Friday stayed the orders of two High Courts passed on Thursday following the central government’s plea that

Kerala and Allahabad High Court orders would destabilise the Indian economy and have far reaching consequences.

The Kerala High Court had ordered that in view of the present Emergency, recovery, penalty etc. on GST be deferred for two weeks till April 6, during which no coercive measures be taken.

In a similar order the Allahabad High Court ordered that “ Auction, Recovery, Eviction and Demolition” by the state be suspended for two weeks.

A Supreme Court Bench comprising Justice AM Khanwilkar, Justice Vineet Saran and Justice Aniruddh Bose took note of the central government’s plea and stayed the orders. The stay order followed Solicitor General Tushar Mehta’s plea that GST collections were used by the Government to pay salary to employees and non-recovery of GST would have serious and far-reaching consequences.

The Solicitor General also argued that since GST and other taxes are paid online, there is no justification for suspending tax collection.

The Government, he told the court, was conscious the situation following outbreak of Covid-19 pandemic and that it would take adequate steps to deal with the situation.

The plea and the Supreme Court’s decision evoked caustic comments with people pointing out that far more liberal relaxations were being announced by way of relief by various countries affected by the pandemic. They wondered how a two-week window allowed by way of relief by the two High Courts would endanger the country’s economy.

Even lawyers in the national capital were surprised and some of their reactions were as follows:

• Whenever a High Court does something for the protection of rights of individuals, the Centre swiftly moves the SC to undermine the relief, and the apex court unquestioningly obliges. Happened in UP Banner case. Now SC has nullified the COVID 19 tax relief.
• A stay of two weeks on recovery would have "destabilised"; Indian economy?
• In other countries, governments are coming up with relief packages of this kind. In India, the Supreme Court steps in to stop it from happening. Sums up the state of the SC.
• It must be really nice being the government in the Supreme Court these days. Stays available for the asking on vague "statements", referrals to larger benches even when the State acts without any law…

In sharp contrast to the attitude of the Government of India and the Supreme Court, the government of Pinarayi Vijayan in Kerala announced a slew of relief measures and a financial package worth₹20,000 Crore. Some of the reliefs announced by Kerala are as follows:

• Free rice to everyone for a month.
• ₹2000 Crore to be disbursed to families in need
• Social security pension for March and April to be disbursed in March itself
• Dates for payment of water and electricity bills to be extended by one month without having to pay any fine.
• 1000 food stalls to be set up by April to provide meals for twenty Rupees.
• Entertainment tax reduction for cinema theatres Relaxations in taxes and duty for the transport sector

The question being asked is that if Kerala can afford to reach out to the people and businesses in need, why can’t the central government defer tax collections for two weeks ?