SC censures Satyam for adopting arrogant tone with government

The Supreme Court today censured Mahindra Satyam, formerly Satyam Computer, for writing to the Government adopting the tone of "arrogance" in the case relating to Rs 617 crore income tax demand, which is being re-assessed by the tax authorities.

Asking the company to withdraw the letter, the apex court expressed displeasure at its tone and tenor that indicated as if Satyam was dictating an order to the Central Board of Direct Taxes (CBDT).

The court said the company had misinterpreted the assurance of the tax department that it would set aside its earlier order seeking Rs 617 crore in Income Tax.

"You cannot do this in such manner. Instruct them (Satyam) to withdraw the letter. This is not the way," a three-judge bench headed by the Chief Justice S H Kapadia said when senior advocates Harish Salve and Abhishek Manu Singhvi, were making submission for the IT firm.

Among other things, the bench took exception to the use of word "shall", written more than once in the letter.

Attorney General G E Vahanvati raised strong objection to the letter saying that it was "highly offensive" and was like dictating order to CBDT.

Sensing the mood of the court, the senior advocates steered clear of the controversy and said the letter was not drafted by them, and they had not seen it.

"We have not seen it. We want to withdraw it and apologise for it. This is not the way the letters are to be written," they said, indicating that it was the work of some junior advocate.

The bench said, "We are quite sure that you have not seen the letters otherwise it would not be so. The present generation is very competitive but is crippled with arrogance."

The court has adjourned the matter to Friday.

The apex court was hearing the plea of the IT firm to defreeze its bank accounts, worth Rs 1,300 crore, by CBDT.

On April 8, CBDT had informed the court that it would set aside its order directing the company to deposit Rs 617 crore.

Attorney General G E Vahanvati, appearing for CBDT, had told the apex court that it would recall its March 10, 2011 order, challenged by Satyam on the ground that calculations were based on fictitious accounts of the previous management, led by disgraced founding Chairman B Ramalinga Raju.

In January 2008, Raju confessed to over Rs 7,000 crore accounting fraud at the company he founded. It was later bought over, through bidding, by Mahindras.

The counsel appearing for Satyam had requested the court to defreeze the company's accounts. It said it urgently needed the money as in a recent negotiation it has paid around 10 million USD to Securities and Exchange Commission (SEC) of USA for overstating the company's revenue, income and cash balances.