SC orders status quo on Rs 617-cr tax demand from Satyam

The Supreme Court today directed the Central Board of Direct Taxes (CBDT) to maintain status quo over its demand of Rs 617 crore in income tax from the scam-hit Satyam Computers till Friday. It also asked CBDT to work out Satyam’s actual liability.

A bench of three judges headed by the Chief Justice S H Kapadia directed CBDT to work out and the actual income-tax liability of Satyam Computers, now Mahindra Satyam.

“Status quo as of today is to be maintained till Friday,” said the bench and directed Additional Solicitor General Harin P Rawal, appearing for CBDT, to submit a chart showing “what would be their liability”.

The bench also hinted that the IT firm would have to pay some parts of the actual demand: “On Friday, they (Satyam) would have to pay some parts of it”.

The apex court’s direction came over a petition filed by the company, challenging the orders of the Andhra Pradesh High Court, which had directed the firm on March 30 a to pay a banker’s cheque of Rs 350 crore and a bank guarantee for Rs 267 crore within a week.

The high court had also said that after receiving the money, the additional commissioner of income tax would withdraw the garnishee orders issued and defreeze its bank accounts. During the proceedings, the bench observed that the revival of the company (as Mahindra Satyam) was supported by the government and the department should consider their claim sympathetically. “You give us the revised figures, otherwise the company would sink... You just take out, the company for which is entitled for,” the bench said.

The bench further said if the government would go for rectification, then the case would go on for years. “We just wanted to know the actual amount they have to submit before us or at the high court,” the apex court said.

Senior advocate Harish Salve appearing for the Satyam Computers submitted before the bench that the company was passing through tough times.