New Delhi, Jan 24: The Supreme Court on January 24, 2025, dismissed a public interest litigation (PIL) seeking to declare the Tax Deducted at Source (TDS) system as “manifestly arbitrary, irrational and violative of various fundamental rights.” A bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar declined to entertain the plea filed by advocate Ashwini Upadhyay.
The bench, while refusing to entertain the petition, remarked, “Sorry, we will not entertain. It is very badly drafted. You can move the High Court. Some judgments have upheld it. We will not entertain. Dismissed.”
The PIL argued that the TDS system violated Articles 14 (right to equality), 19 (right to practice profession), and 21 (right to life and personal liberty) of the Constitution. Upadhyay contended that the system disproportionately burdens taxpayers with significant administrative costs and technical complexities. The petition also claimed that the TDS system disproportionately impacts economically weaker sections and small earners, who lack the capacity to navigate its complexity.
The petition further argued that the imposition of tax collection duties on private citizens violated Article 23, equating it to forced labor. It stated that the regulatory and procedural framework surrounding TDS is excessively technical and often requires specialized legal and financial expertise, which most assessees lack. This, the petition said, results in an unjust shifting of sovereign responsibilities from the government to private citizens without adequate compensation, resources, or legal safeguards.
In addition to challenging the system, the petition sought direction for the NITI Aayog to examine the TDS framework and suggest necessary changes. It also urged the Law Commission to prepare a report within three months to assess the legality of the TDS system.
However, the Supreme Court’s bench advised the petitioner to approach the High Court, citing that the plea was poorly drafted and that previous judgments had upheld the TDS system.
