Talks on with investors for revival, Kingfisher tells SC
As it sought more time to respond to the demands by the Income Tax department, the belaguered Kingfisher Airlines Ltd. today told the Supreme Court that it was in negotiations with the investors for the revival of its grounded fleet.india Updated: Jan 22, 2013 23:08 IST
As it sought more time to respond to the demands by the Income Tax department, the belaguered Kingfisher Airlines Ltd. on Tuesday told the Supreme Court that it was in negotiations with the investors for the revival of its grounded fleet.
"There are some serious negotiations going on with the investors and if they fructify, then we would settle all tax claims," senior counsel Harish Salve, appearing for the airline, told a bench of justice DK Jain and justice Madan B Lokur, seeking four weeks' time.
As Salve pressed for the stay of Dec 5, 2012, interim order of the Karnataka High Court asking the airlines to deposit the 50% of tax amount and furnish a bank guarantee, Justice Jain said: "We will provide you some interim protection, provided you say that I will deposit the principal (tax demand) in such and such time."
Salve said, "I can't make such an irresponsible statement" and added that some serious negotiations were going on with the investors and if they fructify, then payments would be made.
He told the court that Kingfisher Airlines had to pay Rs. 370 crore and it has already paid Rs.135 crore.
"Technically, I have a point that no demand was raised," said Salve, telling the court that since the tax authorities have waited for so long, they could wait for a month or two more.
Though the apex court did not give the airline any interim protection from the high court order, it adjourned the hearing for four weeks.
Kingfisher Airlines in its petition while challenging the high court order, has, as an interim relief, sought to restrain the Income Tax department from taking any coercive step against it directly or indirectly.
The total amount that the tax department has asked the Kingfisher Airlines to pay towards its alleged outstanding tax liabilities pertaining to assessment year 2010-11 to assessment year 2012-13 is Rs.264,55,78,484.
This is the amount that the Income Tax department had mentioned in its May 2012 notices to various banks for the payment that was allegedly due from Kingfisher.
The petition has said that "irreparable injury and harm" would be caused to the Kingfisher Airlines if it was asked to deposit alleged outstanding liability as the carrier was already facing "severe financial crisis on account of reasons beyond its control".
Reasons, the petition said, include global spurt in crude prices, heavy taxes on aviation turbine fuel, the depreciation of rupee against US dollar and the severe financial crunch.
The petition has said that Kingfisher was operating 350 flights a day with more than 60 aircrafts, but due to aggravation of financial crisis and the consequent temporary suspension of its licence by the aviation regulator, the airlines's operations have been suspended.
The high court order, the petition has said, would cause "grave hardship" to the airline and the "public at large in as much the petitioner will not be able to revive its business, for which it is making a serious effort."