Ever since the owner of Kingfisher Airlines (KFA) Shri Vijay Mallya expressed his desire to settle down in London with his children, all the members of consortium of financiers of Kingfisher Airlines are desperately pursuing all agencies to get their money back.
As on date the Chairman of Sahara group is whiling away his time in the secure Tihar Jail for financial irregularities which was unearthed by the dynamic SEBI officials. The money allegedly laundered by Sahara group belonged to private individuals whereas the Kingfisher case is different. This company had taken or rather been granted loans by various Public Sector Banks for expansion of their airline business. CESA-Mumbai has nothing to say about the other financial transactions or irregularities committed by the said company or its owner, but has the right to comment about the discriminatory manner in implementing Service Tax laws in the case of this company.
As on date, Service Tax official records shows around Rs.520 Crores (Rs. 52 Crores collected but not deposited) & the rest in confirmed demands . The money belonged to the passengers who pay the tax to the government while purchasing the ticket but unfortunately the same has not been deposited into the Govt. exchequer by the airline. Rather, the amounts collected in cash have been utilized by the company. As per the Service Tax laws, any person who has collected ST, but not deposited the same and if the amount exceeds Rs.50 Lakhs for over six months, is liable to be arrested. In 2016 budget it is proposed to be raised to Rs. 2 Crore. All the demands are confirmed prior to this announcement. In spite of the ST law being very clear at that point of time, Shri Mallya was never arrested !!
When summons were issued to the Chairman of Kingfisher Airlines, Shri Mallya approached the then Chairman, CBEC, Shri S. K. Goel.
On 25.07.2012, for the first time, Shri Mallya entered the Service Tax office premises at Churchgate, Mumbai and was ushered into the Commissioner’s cabin., i.e. before Shri Sushil Solanki, the then ST-I Commissioner. Shri Mallya's statement was recorded in the Commissioner's cabin by the Commissioner himself. Thereafter the accused was escorted by the Commissioner himself and seen off upto the lift !! This was the type of treatment accorded to by the Department to a huge tax evader...
Shri Mallya's statement should have been recorded in the cabin of the officers who are investigating the case or by their immediate supervisory AC (Anti-Evasion) / ADC (Anti-Evasion), whose office was at Madhu Indl. Estate, Worli.
When the amounts of default runs into hundreds of crores of rupees, why the person responsible for such deliberate default was not arrested, has now become a million dollar question. Why there was such a discrimination, when the Department was/is so harsh in taking action against its own employees for any revenue loss or for even minor irregularlities like taking leave without intimation ?
Officers of Mumbai are known for the arrests of several celebrities, for comparitive smaller amounts evaded, then why is such a big celebrity allowed to roam free till date? What has been seized by the Service Tax Department is a mere six “aircrafts” and two helicopters, at different places, but do not have any seizure value mentioned in the records !! It is anybody’s guess as to how much they are worth today. The Department is in the DRT and has also launched prosecution against the Chairman of KFA in the CMM court, where he has been given bail. But there is no move for taking further action against the said airline, like in the case of other small defaulters.
The tax collected belongs to the country and needs to be paid or recovered forthwith and those who are collaborating with such evaders should not be spared whether that person is in service or otherwise. When the bankers and the agencies are tightening the noose, the Department should not be seen as lagging behind in recovering the dues.
The king should be in the ring and each penny collected as Service Tax but not deposited, should be recovered alongwith interest and all senior officers who have colluded with him should not be spared.
He may claim that he is not a defaulter, but records show that KFA is an evader of Service Tax and is liable for penal action.
When there was a golden period, all the senior officers were around the king of good times, but now it has been shunted down to a Superintendent level officer to attend to the DRT, Courts etc. to recover the amounts...
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