Hearing on Mallya's service tax dues on March 28

The Bombay High Court on Friday adjourned to March 28 the Maharashtra service tax department's plea for recovery of dues from the now defunct Kingfisher Airlines (KFA) and its founder Vijay Mallya.

The department had filed a petition in the court on Wednesday for recovery of service tax dues from the KFA and Mallya, which came up for hearing before Justice C.V. Bhadang.

The court questioned the department for not properly serving notices on the KFA and others before seeking an expeditious hearing and posted the matter for March 28.

Earlier, the department filed two cases in a Mumbai magistrate's court against KFA founder Vijaya Mallya, claiming Rs.32.68 crore and Rs.23.38 crore in service tax dues for two different periods. While one case is currently being heard, the other is pending.

Overall, the department is claiming Rs.150 crore in service tax dues from Mallya.

The department apprehends that if Mallya was absent from the trial in India, it could cause grave prejudice to its cases.

The consortium of 13 banks that have several thousand of crore in unpaid loans to KFA has already been seeking legal remedies. And the Enforcement Directorate has also filed a money laundering case against Mallya.

The department sought freezing of Mallya's passports and restricting his movements abroad as media reports have said his Rajya Sabha term expires on June 30 and he was planning to spend more time abroad.

In its petition, the department contended that large sums of tax collected from passengers of the grounded KFA were not deposited with the government and hence Mallya and other directors of the airline are defaulters of statutory tax, so the amount must be recovered from them.