Centre Assures Supreme Court: Temporary Reprieve for Congress in Tax Dispute During Lok Sabha Elections

New Delhi, 1 April, 2024: In a significant development, the Union Government pledged before the Supreme Court on Monday to refrain from taking any coercive action against the Indian National Congress (INC) concerning an income tax demand of approximately Rs 3500 crores until July 2024, citing the forthcoming Lok Sabha elections. Solicitor General of India, Tushar Mehta, representing the Union Government, assured the apex court bench comprising Justices BV Nagarathna and Augustine George Masih of this commitment.

The assurance came during the hearing of a civil appeal filed by the Congress party in 2018 challenging a 2016 judgment of the Delhi High Court. In the appeal, the Congress party had filed an interim application seeking a stay on recent demand notices issued by the Income Tax Department in March, along with challenging the findings of the High Court. Although the issue under appeal wasn’t directly related to the recent tax notices, the Solicitor General emphasized the need to defer coercive actions due to the impending elections.

“The impugned judgment dates back to 2016. We will refrain from initiating recovery or coercive steps given the ongoing elections. Let the matter be heard in the second week of July,” said the Solicitor General, addressing the bench. In response, the bench recorded the Solicitor General’s statement, indicating, “The issues at hand in these appeals are yet to be fully adjudicated. However, considering the prevailing circumstances, the department opts not to hasten matters, hence, no coercive steps shall be taken over the approximately Rs 3500 crores demand until the next hearing scheduled for 24 July 2024.”

Furthermore, the bench acknowledged that the demand of approximately Rs 3500 crores wasn’t directly pertinent to the controversies in the appeals. Senior Advocates Dr. Abhishek Manu Singhvi and Vivek Tankha represented the Congress party during the proceedings.

This development underscores the delicate intersection between legal disputes and electoral processes, emphasizing the government’s commitment to uphold fairness and procedural integrity even amidst political activities. As the matter stands deferred until July, both parties await further deliberation from the judiciary on this contentious issue.