India's Congress says facing 'tax terrorism' after second tax notice

Rahul Gandhi, a senior leader of India's main opposition Congress party addresses his supporters in a public meeting during Rahul's 66-day long "Bharat Jodo Nyay Yatra", or Unite India Justice March, in Jhalod town, Gujarat state, India, March 7, 2024. /Amit Dave/File Photo

MUMBAI - India's main opposition party said on Friday it had been asked to pay an additional 18.2 billion rupees ($218 million) in taxes, which it called an attempt by the tax department to financially cripple it weeks before general elections.

Calling the latest notice from the Income Tax Department "tax terrorism", Congress treasurer Ajay Maken told reporters the party would fight the demand in court.

India will vote in seven phases between April 19 and June 1 in general elections Prime Minister Narendra Modi is expected to win and secure a record-equalling third straight term.

"The law is on our side, we have no doubt about it, but by the time we get relief, elections will be over," Maken said. The Supreme Court is expected to hear the case on April 1, he added.

A tax department spokesperson did not immediately respond to a request for comment on Friday, which is a public holiday. The tax department has said it can not comment on individual tax notices as they are confidential.

Congress, which has been ruled by the Gandhi-Nehru family, was once India's most dominant political party and has accused Modi of trying to "cripple it financially" before the elections through the tax department.

Last month, the party said the authorities froze some of its bank accounts pending a tax case that dates back to 2018-19 involving 1.35 billion rupees, and its bid to contest this in court was dismissed.

Modi's Bharatiya Janata Party (BJP) has said that the tax case was not politically motivated.

Asked how much the party would be left with to contest the elections after the two tax demands, Maken said: "You think there will be anything left after this?"

Congress has ruled India for 54 of its 76 years since independence from Britain, but it has struggled to win over voters since Modi swept to power in 2014.

($1 = 83.3370 Indian rupees)

(Reporting by Shilpa Jamkhandikar; Editing by YP Rajesh and Miral Fahmy)