Economy

Punjab and Haryana High Court Directs Department Collect Tax Dues in Instalments

The Punjab and Haryana High Court directed the tax department to consider the SpiceJet airline’s plea of paying the tax dues in instalments. In late July 2021, the tax authorities issued a notice asking SpiceJet to pay a tax of around Rs 80.6 crore and furnish details of both movable and immovable properties. Otherwise, the department would initiate the recovery proceedings. 

The Excise and Taxation Department of Haryana sent a show-cause notice to SpiceJet on 27th July 2021 saying that the company had not paid tax dues of Rs 80.6 crore, which included the period of FY 2019-20, FY 2020-21, and FY 2021-22 (April-June). 

The department also stated in the notice that if SpiceJet does not clear the dues by 4th August 2021, it will start recovery proceedings. SpiceJet had responded to the notice saying that they are facing a severe cash crunch due to the adverse impact of the COVID-19. Also, it requested that the tax be in 24 equal monthly instalments. 

Mr Akshay Bhan, the counsel for SpiceJet, submitted that the petitioner’s operations were curtailed due to the COVID-19 pandemic and government control. He stated that SpiceJet had already written a letter to the authorities. Also, it would benefit SpiceJet if a direction is issued to the department to decide the representation filed by the petitioner.

Justice Ajay Tewari and Justice Karamjit Singh’s division bench stated that the counsel’s prayer for the petitioner was fair. Consequently, the court disposed of this writ petition with a direction to the tax department to decide the representation by passing an order within two weeks from the date of receipt of a certified copy of this order.

This judgment would give a huge relief to SpiceJet. However, we have to wait for the tax authorities to decide as requested by SpiceJet or come up with any other proposition to collect the taxes.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

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