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No coercive action against Congress over tax demand until end of Lok Sabha elections: Centre tells SC

The votes are to be counted on June 4. However, the undertaking effectively bars any coercive action till July 24, the date of the next hearing

R. Balaji New Delhi Published 02.04.24, 06:50 AM
Representational image.

Representational image. File Photo

The Supreme Court on Monday recorded an undertaking from the Centre that no coercive action would be taken against the Congress till the conclusion of the general election in connection with its alleged income-tax arrears of Rs 3,500.

The votes are to be counted on June 4. However, the undertaking effectively bars any coercive action till July 24, the date of the next hearing.

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It was not immediately clear whether the government undertaking would have any effect on the freeze imposed on the Congress’s bank accounts in February in connection with some of the tax arrear claims.

The bench of Justices B.V. Nagarathna and Augustine George Masih was hearing the Congress’s application for a stay on the income-tax department’s arrear notices, when solicitor-general Tushar Mehta gave an assurance on behalf of the government.

“...As the petitioner is a political party and since the elections are going on, we would not like any problem arising for any party and therefore till the matter is heard we will not take any recovery or coercive steps till the election,” Mehta said.

“Your Lordships may hear the matter in the second week of July…. Though I have a lot to say on merits… I don’t want to muddy the waters now.”

A surprised Abhishek Manu Singhvi, senior counsel for the Congress, confessed himself “speechless”.

“I am rendered speechless by my learned friend’s (Mehta’s) gracious intervention and very few times I am speechless,” he said.

Justice Nagarathna told Singhvi: “You shouldn’t perceive negatively about someone all the time.”

After sending arrear notices to the Congress in February, imposing a Rs 210-crore fine and freezing some of the party’s bank accounts, the income-tax department last week sent a fresh notice for Rs 1,823 crore.

Earlier in 2016, Delhi High Court had refused to interfere with similar income-tax notices to the Congress, prompting the party to file an appeal in the apex court in 2018. A decision on that writ petition is still pending.

With the high court again refusing relief after the latest notices, the Congress has moved an interim application before the top court.

Mehta told the apex court that the Congress had since 2016 cleared arrears of only Rs 134 crore and the remaining dues amounted to around Rs 3,500 crore.

The bench of Justices B.V. Nagarathna and Augustine George Masih then recorded Mehta’s assurance that no coercive steps would be taken till the elections and posted the matter to July 24.

The Congress has accused the central government of “tax terrorism” and of trying to cripple the main Opposition party financially before the general election.

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