The Centre told the Supreme Court on Monday that it took a conscious decision to not give any grace period for citizens to deposit their demonetised notes after the cut-off date of December 30, 2016.
Doing so would have defeated the very purpose of demonetisation, the government said.
It was replying to the Supreme Court’s appeal to open a window for genuine people, like the terminally ill and invalids, to name a few, who were unable to deposit their demonetised ₹1,000 and ₹500 notes between November 9 and December 30 last year.
‘No grace period’
Noting that these people had over 51 days to deposit and exchange their old notes for the new currency through multiple outlets, the NDA government, in an affidavit filed through the Ministry of Finance, said now there exists “no necessity or any justifiable reason” to provide them a “grace period” till December 30, 2017, as many petitioners have sought in a bunch of petitions.
“The very object of demonetisation and elimination of black money will be defeated if a window is opened for a further period...,” the Centre said.
“The persons in possession of the Specified Bank Notes (SBNs) would have had sufficient time and opportunity to carefully plan the reasons and excuses for not depositing them within the permitted period, ie, before December 30, 2016,” the Centre told the court.
Besides, a grace period would again open the floodgates for benami transactions and user proxies for the depositing SBNs. “The departments would have great difficulty in deciding any genuine case from the numerous bogus ones,” the government said.
Compared to the 1978 demonetisation exercise, where citizens were given only six days to deposit their old notes, the 2016 one gave the people “fairly a very long period” to deposit their old notes.
The government affidavit said that unlike the previous experience when deposit and exchange of old notes were limited to RBI and State Bank or nationalised banks’ offices, in 2016 more types of banking establishments were involved.
It said penetration of the Internet and the electronic media was non-existent compared to the 2016 scenario.
The government contended that the introduction of The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 was a major economic step.
The government said demonetisation lay bare the under-current of black money crippling the country. Income tax raids from April 2014 to February 28, led to the admission of undisclosed income of over ₹36,051 crore along with undisclosed assets worth ₹2,890 crore. Similarly, the Income Tax department conducted more than 15,000 surveys which resulted in detection of undisclosed income of more than ₹33,000 crore. Even some educational institutions were found to have accepted fees in old currency notes after midnight of November 8.
