The Centre told the Supreme Court on Monday it cannot give more time to deposit old currency notes, refusing any breather to those who could not deposit old Rs 500 and Rs 1000 notes by the December 30, 2016, deadline.
The Union finance ministry told the top court that such an opportunity will defeat the purpose of demonetisation, which the government said was aimed at eliminating black money.
"That it is most respectfully submitted that the very object of demonetisation and elimination of black money will be defeated if a window is opened for a further period as the persons in possession of the SBNs would have had sufficient time and opportunity to carefully plan the reasons and excuses for not depositing the SBNs within the permitted period," read a government affidavit.
"Any number of benami transactions and user proxies for the purpose of producing and depositing SBNs would then arise which the departments would have great difficulty in deciding any genuine case from the numerous bogus ones," a government affidavit stated.
Prime Minister Narendra Modi's government recalled 500 and 1,000-rupee notes last November, wiping out 86% of the money in circulation in a cash-driven economy. Modi said the exercise was a war against black money and corruption.
But the sudden decision led to chaos and confusion, with people queuing up outside banks to deposit their old notes. The Opposition attacked the government for alleged mismanagement and harassing the people.
Modi said the short notice was vital to ensure that black money holders were deprived of the opportunity to launder their money. However, the RBI says it has still not determined the exact figure of the returned notes.
The last official estimate from the RBI, shared in mid-December, pegged the returned notes at Rs. 12.5 lakh crore.