The Supreme Court on Tuesday stayed a Delhi High Court order that ruled that imposing Integrated Goods and Services Tax on oxygen concentrators imported for personal use was unconstitutional, Bar and Bench reported.

A bench of Justices DY Chandrachud and MR Shah was hearing a special leave petition filed against the high court order by the Ministry of Finance.

The bench noted that the Goods and Services Tax Council had set up a Group of Ministers to consider tax exemption for Covid-19 relief. Attorney General KK Venugopal told the court that a GST Council meeting was scheduled to take place on June 8 to discuss the matter.

During the hearing, Justice Chandrachud highlighted that oxygen concentrators imported by government agencies were already exempted from the tax. Venugopal told the judge that the purpose in that case was to distribute oxygen concentrators to the poor, which was not the same when the equipment was imported for personal use, according to Live Law.

Venugopal added that the matter was to be discussed on June 8, but the high court’s judgement “tied the hands of the Centre”.

The Supreme Court bench said: “It has been submitted that the High Court entered into an area of policy and exemption is based on distinct classification. May be High Court did not see the objective of this. Article 14 has reasonable classification also. We don’t know if this was argued in High Court.”

The court said the Delhi High Court order will be stayed till the next date of hearing. “Matter returnable in four weeks,” the court order said, according to Bar and Bench.

The Delhi High Court judgement

On May 21, the Delhi High Court had quashed the Centre’s order to impose a 12% Integrated Goods and Services Tax on oxygen concentrators imported for personal use.

Referring to the oxygen shortage in the country amid the massive second wave of the Covid-19, the court had said that it was a “George Floyd” moment for India. “The refrain is – I can’t breathe, albeit, in a somewhat different context and setting; although in circumstances, some would say, vastly more horrifying and ghastlier,” Justices Rajiv Shakdher and Talwant Singh had said, according to Bar and Bench. “Chased and riven by the merciless novel coronavirus, the citizenry has been driven to desperation and despair.”

The court’s order was based on a petition that claimed imposing tax on the equipment violated Article 14 of the Constitution of India (equality before law) and curtailed the right to have oxygen, an aspect of Article 21 (right to life).

India struggled with a grave oxygen crisis in the second wave of the pandemic. The acute shortages of oxygen and medicines forced families and friends of patients to plead for help on social media.

The crisis could have been partly diffused had India utilised the past year to create localised solutions in the form of small-scale oxygen generation plants within hospitals on a war footing.

It takes just four to six weeks to install a Pressure Swing Adsorption oxygen generator at a hospital, said industry players and government officials. The average cost comes to just Rs 1.25 crore, based on the Centre’s outlay of Rs 201 crore for 162 oxygen plants.

But an investigation by showed that the central government took eight months to float a tender, and six months later, PSA oxygen plants were operational in only five of the 60 hospitals we called. Hours after the report was published, the health ministry admitted only 33 of the 162 PSA oxygen plants it had commissioned had been installed.

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