Coronavirus: SC stays orders preventing action against non-payment of taxes

The Supreme Court on Friday stayed Kerala and Allahabad High Court orders, which directed banks, financial institutions, income tax department and GST authorities to defer recovery proceedings or coercive measures till April 6 in the states in light of the coronavirus outbreak.

A three-judge bench headed by Justice Khanwilkar stayed all the proceedings pending before both the High Courts and stayed the order of the High Courts.

The top court also recorded the statement of Solicitor General Tushar Mehta, appearing for the Government of India, that Centre is conscious of the difficulty faced by the people and would itself evolve a proper mechanism without causing any hardship to anyone.

The bench also took into note the orders of the High Courts passed without hearing the Central government and issued notices to the parties who filed petitions before the High Courts.

Solicitor General Tushar Mehta mentioned the matter before the top court seeking urgent hearing of its appeals against orders.

Mehta told the court that High Courts had deferred the payment of taxes across the country during the coronavirus.

"People can make payment online and there is no need to pass such order. Those who are volunteering to make payment of tax should not be stopped. There can't be court order on stopping people from paying tax. The order passed by Kerala High Court pan India," Mehta told the court.

He said High Court exceeded their jurisdiction in giving broad omnibus directions to defer recovery proceedings by various tax authorities of Central and state governments as well as by banks under Section 14 of the SARFAESI Act, till April 6, 2020.

The petition, filed by the Centre, stated that High Courts orders are in violation of the doctrine of separation of powers inasmuch as the courts have encroached upon functions of the executive and have transgressed into the realm of taking a policy decision without any notice to the Government of India.

The plea said that the orders will severely impact the monthly revenue collections of the government, which are to the tune of Rs 2 lakh crores.

The Kerala High Court had, on March 19, had also restrained the adjudicating authorities from passing any adverse order till April 6.