The luxurious Airbus 319 was attached by the service tax department in lieu of tax dues pending from April 2011 to March 2012 and from April 2012 to September 2012.
The service tax department on Wednesday received severe flak from the Bombay High Court for moving an application requesting the court to recall its earlier order allowing the auction sale of the corporate jet that once flew the king of good times Vijay Mallya.
The luxurious Airbus 319 was attached by the service tax department in lieu of tax dues pending from April 2011 to March 2012 and from April 2012 to September 2012.
After four failed attempts at auction, the tax department received a purchaser who agreed to bear the expenses to make the plane flight worthy and clear it at the earliest. On those grounds, the department had made a plea to the court to allow the sale, stating that it had found the highest bidder who had quoted a price of $4.1 million (Rs 27.39 crore).
The high court then passed its order on August 22 allowing the sale of the jet.
However, Additional Solicitor General, appearing for the service tax department on Wednesday moved an application stating that the successful bidder M/s SGI Commex Ltd's offer price is 81.08% below the reserve price and thus as per the draft disposal manual it cannot be allowed to have such lower price auction. The maximum lowest bid allowed is up to 20% below the base price.
A division bench of Justice S C Dharmadhikar and Justice B P Colabawala came down heavily on the department by saying that while seeking permission earlier to close the auction sale the department was well aware of the price being lower, then how is it that it is suddenly woken up now.
The delay is causing heavily to the airport authorities and precious business of theirs is being lost as the plane continues to occupy the space. The court also warned that it would make the department and the auction purchaser pay the cost along with interest for this wrongdoing. The court has now posted the matter for further hearing on September 19 and directed the auction purchaser to file its reply to the plea of the department.
The aircraft, once owned by Vijay Mallya, is languishing at Mumbai airport. The jet, which can carry 25 passengers and 6 crew members, is exclusively designed for exotic and luxurious use, the department has said in the auction notice.
The Airbus luxury business jet that served Mallya as his home-cum-office with 6,000 cubic feet of living space in the sky, is one of the most expensive business jets in India valued at $40 million (nearly Rs 266 crore). It has conference halls, meeting rooms and a bedroom with an attached bath.
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