Bombay HC defers Service Tax dept plea against Mallya to March 28

No one appeared for Vijay Mallya and Kingfisher Airlines on Friday

The Bombay High Court on Friday delayed till March 28 hearing on two applications filed by Service Tax Department for recovery of over Rs 32 crore from now-grounded Kingfisher Airlines and its chief Vijay Mallya.

One application challenged a magistrate's order granting anticipatory bail to Mallya and others in a case filed by the department against them for recovery of Rs 32.7-crore service tax collected by the airline from passengers during 2010-11, but not deposited in the government treasury.

The other application sought a direction to Mallya and other directors to appear before a trial court on April 6 for the next hearing, and also in the high court in this case.

Judge C V Bhadang on Friday asked the Service Tax Department to serve copies of the two applications to the airline, Mallya and others before March 28.

"It would be a travesty of justice if Mallya leaves the country and does not return to pay the dues in the form of service tax, admittedly, collected from the passengers," the department earlier filed in the application.

It pleaded that since dues were not paid to the government, the petition against Mallya should be heard as expeditiously as possible.

The department had filed two cases in a magistrate's court in Mumbai for recovery of dues. In one case pertaining to recovery of Rs 32.7 crore as service tax, the lower court had granted anticipatory bail to Mallya last year, on the grounds that the offences were bailable.

The department challenged the order in the Bombay High Court last year, contending that the offences were non-bailable.

It urged for quashing and setting aside the order of the magistrate. This petition (appeal) is pending in the high court since 2015.

Meanwhile, the department filed another application seeking presence of Mallya in the trial court and high court, and also urging it to impound his passport and restrict his movements abroad. This application is currently being pressed for expeditious hearing.
 

The High Court on Friday enquired from lawyer Advait Sethna why the Service Tax department had not followed up this matter since July last year.

To this, the lawyer replied, "We have been persistently following up the matter since then and had also served copies earlier to the respondents, but they did not remain present following which the high court had issued notices to them in December last year."

Sethna argued that Mallya had not disclosed to the trial court that he was leaving the country and had gone abroad without giving this information.

The department's lawyer also argued that the application filed by it should be heard before April 6, when Mallya has been directed to appear in the trial court.

He said recovery of statutory dues from Mallya was important and in public interest.

No one appeared for Mallya and Kingfisher Airlines on Friday.

Significantly, the Supreme Court had issued notice to Mallya two days back and sought his response within two weeks on a plea filed by a consortium of banks seeking direction for freezing his passport and his presence before the apex court in a case pertaining to recovery of loans amounting to Rs 9,000 crores.