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Kingfisher Airlines: More trouble ahead

Kingfisher Airlines is likely to face more trouble soon with the Revenue Department.

Written by Agencies | New Delhi |
October 29, 2012 8:49:03 pm

Kingfisher Airlines,which days ago emerged out of an impasse over salary payment to its staff,is likely to face more trouble soon with the Revenue Department deciding to move the Supreme Court to expedite recovery of about Rs 330 crore dues.

The department’s decision to move a Special Leave Petition comes in the backdrop of the Airports Authority of India (AAI) also asking it to vacate two hangars in Kolkata and Chennai airports to recover dues worth Rs 293 crore,official sources said.

The SLP,which is to be filed jointly by the Income Tax and Service Tax departments,would apprise the apex court “of the magnitude of pending dues to the government” and seek vacation of a September 26 Karnataka High Court order restraining the I-T department from making “further recovery”.

Following this,the I-T department had lifted its attachment orders on the airline’s bank accounts.

While the I-T department dues stand at around Rs 269 crore,the airline owes Rs 60 crore to Service Tax department.

The sources said the SLP would be moved soon by both the arms of the Revenue Department jointly.

The decision to move the SLP was taken recently by the apex policy making body of both the departments – the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) – at a meeting in the Finance Ministry.

“It has been decided in the meeting that a proposal should be moved by the Chief Commissioner Income Tax Bangalore for filing SLP against the vacation of stay of recovery proceedings (against Kingfisher) granted by the Karnataka High court,” a note prepared by the CBDT said. The beleaguered carrier is assessed by the Bangalore I-T circle.

In a separate development,the AAI has shot off a letter to Kingfisher asking it to vacate two hangars it occupies at Kolkata and Chennai airports,official sources said.

The authority is likely to tell the Directorate General of Civil Aviation (DGCA) that the Vijay Mallya-owned carrier should first clear its dues before getting a clearance to get airborne again,the sources said.

The aviation regulator is going to consult the airline’s stakeholders like airport operators,employees,oil companies and other vendors,who have substantial dues from it,before deciding on revoking the suspension of its flying license.

All Kingfisher flights have remained suspended since September 30 due to a strike by its staffers over delay in salary payment,followed by a lockout from October 1 and then suspension of their Scheduled Operator’s Permit by DGCA on October 5.

Kingfisher is saddled with a loss of Rs 8,000 crore and a debt burden of an additional over Rs 7,524 crore,a large part of which has not been serviced for several months.

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