Supreme Court stays Kerala HC order on deferring recovery process

The Supreme Court on Friday stayed a Kerala High Court (HC) order that directed tax departments and financial institutions to defer recovery proceedings till April 6 in light of the coronavirus pandemic. 

A Bench headed by Justice A M Khanwilkar took note of the submissions of Solicitor General Tushar Mehta, who appeared for the Centre, that the Kerala HC order needed to be stayed. Mehta said a similar order had been passed by the Allahabad High Court.

Explaining the case, Harpreet Singh, tax partner at KPMG, said the Kerala HC, taking suo moto note of the prevailing “precarious” situation of the pandemic, had directed the income tax authorities, authorities dealing with the goods and services tax and value-added tax, financial institutions, banks, etc. to defer the recovery proceedings or coercive measures till April 6.

The Kerala HC single judge Bench took note of the fact that government departments are issuing recovery notices, compelling litigants to approach the court for interim stay. This is clogging the HC, leaving judges and lawyers and court staff “vulnerable” to the coronavirus pandemic, he observed. The Kerala HC said “... handling of the files by the high court staff as well as the advocate general staff is done without proper precautions, as they are handled with bare hands instead of using protective measures like gloves etc....”