SC dismisses Kingfisher's tax plea

The Supreme Court on Friday dismissed a petition filed by the Vijay Mallya-owned Kingfisher Airlines challenging a Karnataka High Court order which directed it to deposit around Rs 185 crore with the Income Tax department as tax deducted at source (TDS) from its employees.

A three-judge bench presided over by Justice R M Lodha declined a plea made by senior advocate Harish Salve, appearing for the company, to keep the matter pending.
The counsel pleaded the court to adjourn the matter for three weeks saying there was some possibility of arrangement of money by the company. He submitted that since there was no order in their favour, any adjournment granted by the court would not affect the I-T department.

Additional Solicitor General Gourab Banerjee, appearing for the department, submitted that it had not received a single penny during the pendency of the matter since January.

“We can allow your (Kingfisher’s) request only if the other party agreed and it is not so. It is a pecuniary liability on you. Whatever you have deducted from the salaries of your employees, you must pay at least that much,” the court said, dismissing the petition.

On January 16, the company approached the apex court against the high court order passed on December 5.

Earlier, the court had allowed the company’s plea for adjourning the case as some negotiations were on. In its special leave petition, Kingfisher challenged the order directing it to deposit 50 per cent of the total amount of Rs 371 crore, which the company was required to remit to the I-T department as TDS from its employees and payment made towards company expenses. The high court had also asked the company to furnish bank guarantee for the remaining amount in six weeks.

The Income Tax department raised a demand of Rs 371 crore as TDS from the company for assessment years 2010-11, 2011-12, and 2012-13 after the search conducted on the company’s premises in Bangalore and other places. The department had attached the bank accounts of the company for a certain period during February 2012, and recovered some part of the amount.

The petition claimed the company which operated 350 flights a day with more than 60 aircraft faced financial constraints due to global spurt in crude prices, heavy taxes on aviation turbine fuel in India, and depreciation of rupee against dollar, leading to suspension of licence by the DGCA.