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Bombay HC to hear Service Tax Dept plea against Mallya

Bombay HC to hear Service Tax Dept plea against Mallya

The Service Tax department in the city knocked the doors of the Bombay high court on wednesday for a relief, similar to what the banks sought from the Supreme Court, to secure the presence of former UB Group chairman Vijay Mallya. The government authority wants to recover outstanding dues worth Rs 115 crore.

Special counsel Advait Sethna, for the department, sought an urgent hearing and argued before Justice C V Bhadang that its case was “distinct”. He said Mallaya had admitted to having collected Rs 32.68 crore from passengers as service tax but not deposited it with the treasury, thus causing a loss to the public exchequer.

The department last year challenged a February 2015 order of a Mumbai magistrate, as being “illegal” and sought to have it quashed “for having wrongly considered the offence of non-payment of service tax, admitted dues, as a bailable offence.” He said, “the offence is a continuing one and thus not bailable,” but added that the department was not challenging the grant of bail to Mallaya. Before the SC, only banks are a party, not the department, he said.

Sethna said “the present situation requires that to ensure that sovereign dues are protected, the application be heard on priority.” Mallaya, said he is a non-resident Indian since 1988 and can spend maximum 175 days each year in India.

The HC which had in the morning, deferred the matter to post-lunch session, posted it for a hearing to February 11.

The assistant commissioner of Service Tax, Mumbai, had filed a complaint against Mallaya and several senior executives of now-defunct Kingfisher Airlines in 2012 over unpaid dues. Between April and September 2011, alone, the department said the Airlines had collected Rs 78 crore as service tax but not deposited it.

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