Sahara takes Jet to court over tax dues
01 April 2009
Sahara India Commercial Corporation Ltd has moved the Bombay high court against Jet Airways for alleged non-payment of instalments related to the buyout of its erstwhile Sahara Airlines (now JetLite) in April 2007.
"Sahara India has not accepted this position (that income tax liability prior to the takeover is to be borne by Sahara) and moved the high court for relief. Since the matter is sub judice, we do not want to comment further," a Jet spokesperson said. Sahara too confirmed the development, but refused to give details.
Jet Airways had purchased Sahara Airlines in 2007 for Rs1450 crore, and paid Rs900 crore upfront. Over the next four years (beginning 2007), the private air-carrier had agreed to pay Rs137-crore as yearly instalments. Any default from Jet means that Sahara can claim Rs 2,000-crore from the former.
The income tax department has raised certain demands on Sahara India Airlines for the period prior to the takeover and unrelated to the activities of JetLite before the takeover, The Jet Air spokesperson said. He added that it is the position of Jet Airways that this liability is to be borne by Sahara.
Jet Airways has sent a notification to the Bombay Stock Exchange saying there is a disagreement between the two on an income tax-related issue. It says that this liability should be borne by SICCL India, since arrangements for this liability were not made by SICCL. In turn, Jet Airways deducted the amount from the payment it makes to SICCL.
Jet's payout to Sahara in case of a single year's default could be as much as Rs550 crore if it loses the case, according to a source quoted by Reuters.