Supreme Court Directs Union To Consider 60-Day Tax Relief For Seafarers Stranded In India During COVID-19

The Supreme Court on 21 August directed the Union of India to sympathetically consider representations filed by Merchant Navy Officers and Ladies Association (MNOLA) seeking a 60-day tax exemption for Indian seafarers who remained in India for more than 182 days during the COVID-19 pandemic.

A Bench comprising Chief Justice Surya Kant with Justices Joymalya Bagchi and V. Mohana disposed of the writ petition without expressing any opinion on merits and directed the Union to take an appropriate decision within four weeks. The Court said:

"We find that the issue has been raised by the petitioner in the representations (Annexures P-2 & P-3). We, therefore, without expressing any opinion on merits, dispose of this petition with a direction to the respondents to consider that representation(s) sympathetically and particularly in light of the decisions reported in Gaurav Baid vs. Union of India, (2021) SCC OnLine SC 3192, Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal, (2020) 7 SCC 1, Gujarat Assembly Election Case, (2002) 8 SCC 237, Union of India vs. Azadi Bachao Andolan, (2004) 10 SCC 1 and Shri Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise, (2016) 3 SCC 643. 3. It shall be appreciated if an appropriate decision is taken within four weeks."

MNOLA challenged the Central Board of Direct Taxes (CBDT) Circular dated 8 May 2020, contending that the COVID-19 pandemic and suspension of international ports and air transport prevented Indian seafarers from leaving the country, causing them to cross the 182-day residential threshold under the Income Tax Act.

The petitioners alleged that the authorities failed to account for the exceptional circumstances created by the pandemic and acted arbitrarily by ignoring the disruption to international travel. The petition stated:

“Because the Respondent no. 1 took an arbitrary view by ignoring the fact that the all the world's major ports and air lines transport were suspended across the world due to Covid-19 pandemic since January, 2020 and it forced the Indian Seafarers to stay back in India exceeding the period of 182 days.”

MNOLA had raised the issue through representations before the authorities and sought consideration of its request for a 60-day exemption in view of the circumstances arising from the pandemic.

The Court noted that the issue had already been raised through the representations and directed the Union of India to consider them sympathetically, particularly in light of the judgments referred to in its order, including Gaurav Baid v. Union of India, Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, Gujarat Assembly Election Case, Union of India v. Azadi Bachao Andolan and Shri Bhagwati Steel Rolling Mills v. Commissioner of Central Excise.

Accordingly, the Bench directed the Union of India to take an appropriate decision on the representations within four weeks and disposed of the writ petition along with all pending applications.

For Petitioner: Prabhjot Singh, Adv. Mr. Raj Kishor Choudhary, AOR Mr. Shakeel Ahmed, Adv. Ms. Pratibha Singh, Adv. Ms. Gulfeshan Javed, Adv. Mr. Vikram Patralekh, Adv. Mr. Himanshu Gupta, Adv. Dr. Khushbir K. Waraich

For Respondent: Arijit Prasad, Adv. Ms. Ankita Singh, Adv. Mr. Deepak Kumar, Adv. Mr. Shashank Bajpai, Adv. Mr. Amrish Kumar, AOR Dr. Arun Kumar Yadav, Adv. Mr. Raj Bahadur Yadav, AOR