The Centre is likely to move the Supreme Court against the Delhi High Court judgment on oxygen concentrators.
On Friday, while disposing of a petition by a 85-year- old citizen, the HC court held that imposition of IGST (Integrated Goods & Services Tax) on oxygen concentrators, which are imported by individuals and received as gifts (free of cost) for personal use, is unconstitutional. It also quashed the notification dated May 1 which prescribes concessional IGST at 12 per cent. However, this does not mean the previous rate of 28 per cent will be applicable; import without any IGST will be possible till June 30 as permissible by the government or an agency authorised by the government. Government sources told BusinessLine that the tax department might file an appeal ‘very soon’ in the Supreme Court as the order is against the interest of revenue.
‘Ad hoc exemption’ order
On May 3, the Centre issued an ‘ad hoc exemption’ order granting exemption from IGST on the import of Covid relief materials, including oxygen concentrators, received free of cost for free distribution, on condition that only the government or government- approved agencies will get the exemption. Basic customs duty (BCD) was already exempted till July 31.
The High Court came down heavily on this order. It said imposition of IGST only on oxygen concentrators that are imported for Covid relief through a canalising agency creates, “to our minds, a manifestly arbitrary and unreasonable distinction between two identically circumstanced users depending on how the oxygen concentrator has been imported.
‘Artificial distinction’
Further, the HC mentioned that the exclusion of individuals from the benefits of the May order was violative of Article 14 of the Constitution. “While it is permissible for the State to identify a class of persons, to whom tax exemption would be extended, it is not permissible for the State to exclude a set of persons who would ordinarily fall within the exempted class by creating an artificial, unreasonable, and substantially unsustainable distinction,” it said.
According to the Bench, while there is recognition that the right to health, among others, flows from the right to life as encapsulated in Article 21 of the Constitution, it requires to be tempered as the State does not have inexhaustible resources.
The Bench felt that no respectable man would want to turn himself into a charity case. “It is trite to state that if one aspires for a civilised society, then those who are obligated by law should pay their taxes. Likewise, the State should relent, or at least lessen the burden of exactions which take the form of taxes, duties, rates and cess, in the very least, in times of war, famine, floods, epidemics and pandemics since such an approach allows a person to live a life of dignity which is, a facet of Article 21 of the Constitution,” the Bench said while disposing the matter.