Supreme Court dismisses Kingfisher plea against tax demand
Airline says it is in talks with investors to revive grounded fleet
New Delhi: The Supreme Court Friday dismissed a petition by business baron Vijay Mallya’s Kingfisher Airlines challenging the Karnataka High Court order directing it to deposit 50 per cent of the amount demanded by the income tax department and provide a bank guarantee for the balance.
Dismissing the petition, a bench of Justice R.M. Lodha, Justice J.Chelameswar and Justice Madan B. Lokur said the tax demand raised by the income tax department pertained to tax deducted at source from the payments made to its staffers by the KFA.
As it dismissed the plea, the court also turned a cold-shoulder to the plea by senior counsel Harish Salve seeking the adjournment of the hearing for another three weeks to enable the airlines to mobilise funds to meet the tax demand.
The apex court had January 22 given the airlines four weeks time to neutralise its tax liabilities as Kingfisher said that it was in negotiations with the investors for the revival of its grounded fleet.
The high court by its December 5, 2012, order had asked the airlines to deposit the 50 per cent tax amount and furnish the bank guarantee for the same.
Kingfisher Airlines, in its petition, while challenging the high court order, had sought to restrain the income tax department from taking any coercive step against it directly or indirectly.
The high court order, the petition had said, would cause “grave hardship” to the airline and the “public at large in as much the petitioner will not be able to revive its business, for which it is making a serious effort”.
Liabilities
The petition had said that “public money has been invested in the business of the petitioner and if as a result of impugned order, the petitioner is not able to revive its business, gave hardship will be caused to the public at large”.
The total amount that the income tax department had asked the airlines to pay towards its alleged outstanding tax liabilities pertaining to assessment year 2010-11 to assessment year 2012-13 is Rs2.64 billion.
This is the amount that the income tax department had mentioned in its May 17/18, 2012 notices to various banks for the payment that was allegedly due by the airlines.
The petition had said that Kingfisher was operating 350 flights a day with more than 60 aircraft, but due to aggravation of financial crisis and the consequent temporary suspension of its licence by the country’s aviation regulator, its operations have been suspended.
