HC junks Jet Airways' plea for refund of tax for carrying sky marshals

Jet Airways' plea for the refund of Rs 2.36 crore inland air travel tax (IATT) paid for carrying sky marshals on its aircrafts from October 2001 to October 2003 has been rejected by the Delhi High Court which said the airline was exempted from the tax only after October 8, 2003.
A bench of Justices S Muralidhar and Pratibha M Singh refused to interfere with the custom authority's decisions of November 2004 and December 2006 upholding the tax demand.
It said the airline has not challenged the circulars by which exemption from the tax in respect of sky marshals was first given to Indian Airlines in 2001 and later to private airlines after October 8, 2003.

Sky marshals also known as air marshal, flight marshal, or, in the United States, FAM, are covert law enforcement or counter-terrorist agents on board a commercial aircraft to counter aircraft hijackings.
The court also noted that the airline had not sought a declaration that sky marhals were not 'passengers' as defined in the Finance Act, 1989 and, hence, no IATT was payable for carrying them.
The bench noted that the government had made it mandatory for air carriers to carry sky marshals in view of the increasing threat perception to passengers, crew and aircraft.

Jet Airways, according to its plea challenging the custom authority's two orders, had deposited Rs 2.36 crore between October 2001 to October 2003 towards the IATT for carrying sky marshals.

On seeking refund of the amount, the customs authority sanctioned refund of Rs 6.48 lakh for the period subsequent to October 8, 2003, after exemption was granted to private airlines, but the remaining refund claim amount of Rs 2.29 crore for the period from October 1, 2001 to October 7, 2003 was rejected, the airline had said in its petition.
The bench said the two orders of the custom authority could "not be faulted with" as exemption from the IATT was extended to other domestic private airlines only on October 8, 2003.
"Prayers in the writ petition being restricted to the correctness of these two orders only, no case is made out. In facts and circumstances of the present case, the writ petition is dismissed, with no order as to costs," the court said.