Service tax dept digs deeper to recover dues from Mallya

The dept gathering more data on assets possessed by Mallya for an auction

As the service tax department put liquor baron Vijay Mallya's corporate jet on the block on Wednesday, it is also in the process of gathering more data of various other assets of the Kingfisher Airlines promoter to recover dues of around Rs 600 crore.

"We have been gathering full details of his assets. We are in the process of ascertaining how many assets are there and how many can be auctioned and what could be the proceeds," said a government official. However, it might not be easy given there are other claimants looking for recovering dues such as banks and the income tax department.

"It is a little complex as there will be other agencies interested in those assets and all of us would put our claims there. There can also be a situation where the court will ask us to conduct a joint auction of assets and share the proceeds," said the official.

According to the service tax department, Kingfisher Airlines had collected large sums of money as service tax from passengers but did not deposit any money to the exchequer.

The Commissionerate of Service Tax on Wednesday advertised for the auction of former UB Group chairman Mallya's 25-seater corporate jet A319, exclusively designed for exotic and luxurious use, to be conducted by state-run MSTC Ltd, the official selling agent of the service tax department. The auction of aircraft will be conducted on May 12 and May 13. Inspection could be done from April 2 onwards till May 10.

Earlier this month, the service tax department had approached the Bombay High Court seeking dues from Kingfisher Airlines and seizure of Mallya's passport.

The move to auction the jet comes at a time when banks failed to sell Kingfisher House, near Mumbai Domestic Airport, with no bids coming in as Rs 150 crore reserve price appeared too high for potential bidders. Kingfisher owes nearly Rs 9,000 crore to a consortium of 17 banks led by SBI. The service tax department had two cases against Mallya before a Metropolitan Magistrate's court in Mumbai in respect of service tax dues of Rs 32.68 crore and Rs 23.38 crore, respectively, for different periods. The department has said the total disputed liability of Mallya with respect to service tax stands at about Rs 500 crore, while admitted liability is Rs 56.06 crore.
UNDER THE HAMMER

• Service tax dept gathering more data on assets possessed by Mallya for an auction
   
• It has to recover dues worth over Rs 600 crore through auctions
   
• Charge is that Mallya had collected service tax from passengers but did not deposit it with the govt
   
• The dept has announced auction of Mallya's corporate jet A319
   
• Auction will be conducted on May 12 and 13