A dispute arose between Jet Airways and Sahara over the payment of income tax dues, each claiming it was the responsibility of the other to pay the amount.
Jet Airways was today directed by the Bombay high court to pay Sahara India Rs478 crore within two weeks following a legal wrangle over the dues on the Rs1,450 crore takeover deal of Sahara Airlines (now Jetlite) four years back.
Justice Dhananjay Chandrachud held that Jet Airways was liable to pay Sahara Rs478 crore, which includes interest at 9% per annum. This amount was computed on the principal amount of Rs402 crore, the court said in an oral order.
The judge, however, rejected the petition filed by Sahara claiming Rs2,000 crore as the total sum for the take over instead of the renegotiated amount of Rs1,450 crore agreed between Jet Airways and Sahara on account of default in payment.
Jet Airways bought Sahara Airlines in April, 2007, for Rs1,450 crore after an arbitration award. It paid Rs900 crore and agreed to pay the balance in four instalments.
A dispute then arose between Jet Airways and Sahara over the payment of income tax dues, each claiming it was the responsibility of the other to pay the amount.
Jet Airways contended that in March, 2008, the IT Department had demanded tax dues of Rs107 crore from Sahara.
According to Jet Airways, this amount was due from Sahara Group as it pertained to the period before the acquisition but this was contested.
While paying Sahara an instalment of Rs137 crore in March, 2008, Jet deducted Rs37 crore against I-T dues. Again in 2009, Jet deducted another Rs50 crore toward tax dues.
Sahara contended that it was not liable to pay tax dues since the airline had already been taken over by Jet Airways.
During the course of the hearing, certain properties of Jet Airways were attached. Jet Airways had given an undertaking in the High Court that it will not dispose of the property till the payment is made to Sahara or till the dispute is settled between them.
The court held that this undertaking would stand dissolved once the dues are paid because by then, the solvency of Jet Airways would be established.
Sahara had in March, 2009, moved the high court contending that the Naresh Goyal-led airline was liable to pay Rs2,000 crore, instead of the renegotiated amount of Rs1,450 crore agreed between them as it had defaulted on payment.
Sahara submitted that the takeover price had been brought down to Rs1,450 crore from Rs2,000 crore provided Jet Airways would not default on payment.
It said Jet had defaulted on payment and, therefore, concession on the takeover deal was not tenable and Jet Airways had to pay the original price.
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