The Supreme Court has sought response from the Ministry of Finance on a petition challenging its denial to grant Income Tax relaxation to seafarers, who could not move out of the country due to the Covid-19 pandemic.

The plea, filed through advocate Raj Kishore Choudhary on behalf of the Merchant Navy Officers and Ladies Association, argued that the government took an arbitrary view by ignoring the fact that all the world's major ports were closed and airlines service  suspended across the world due to Covid-19 since January, and this forced the Indian seafarers (non-resident status holders) to stay in the country for more than 182 days.

Counsel argued that around 90,000 seafarers were stuck and forced to stay back in India, therefore, there should be a liberal interpretation of tax policy.

A bench comprising Justices R.F. Nariman, Navin Sinha and K.M. Joseph issued notice on the petition, challenging the validity of May 8 notification issued by the Central Board of Direct Taxes, under the Finance Ministry, which denied seafarers concessions in assessing Income Tax for financial years 2019-20 and 2020-21, on compassionate grounds.

The Centre, through this notification, declined to provide tax relaxation for the period of 60 days to the seafarers, who stayed for more than 182 days in India.

The petitioner contended that the Ministry of Home Affairs came out with a policy and framed SOPs that any seafarer would be allowed to sign in on the port only after a test for Covid-19 is found negative, failing which action, as per guidelines of the Ministry of Health and Family Welfare, would be taken.

"This clearly shows that there was no facility for seafarers to join back to their respective ships from December 2019 till April 22, 2020," said the plea.

The petitioners have urged the top court to quash this notification and direct the Centre to frame a tax policy for seafarers with a compassionate view.

The plea said: "The petitioner impeaches the validity of the said letter/circular 11 of 2020 dated May 8, on the ground that respondent government has restricted themselves only from the date March 22, 2020 till March 31, 2020, and has given a relaxation of only 8 days on account of the outbreak."