File affidavit on plea on Vijay Mallya's jet: HC tells firm

The Bombay High Court yesterday asked city-based firm SGI Commex, which claims to have won the auction of Vijay Mallya's luxury jet, to file an affidavit in response to a petition filed by Mumbai International Airport Ltd (MIAL), seeking taxes and hangar charges of Rs 3.95-crore. The Service Tax Department also asked in the Bombay High Court for the sale of the personal jet to be cancelled. Interestingly, the personal jet was sold at the price of Rs 27.39-crore, one-sixth of the reserve price to SGI Commex by Service Tax Department, which had seized it, as Mallya owes it Rs 800-crore.

An auction was held by the Service Tax department on August 18, in which the personal jet, Airbus A319-133, was sold to art connoisseur G S Srivasatava, Chairman of SGI Commex, who plans to convert it into an art pilgrimage venture.

Though the reserved price for the plane was Rs 152 crore, the department accepted the bid of SGI Commex at Rs 27.39 crore. Mallya owes MIAL around Rs 3.95 crore. MIAL has approached the HC to get the money from SGI Commex.

Heavy discount
Additional Solicitor General Anil Singh who appeared for the Service Tax department, told Justices S C Dharmadhikari and B P Colabawala, that the plane was sold at a price that was 81.8 per cent less and that it did not fit the manual of auction which allows selling below only 20 per cent reserved price.

"There seems to be some kind of connivance between the buyer and seller that needs to be probed," Justice Dharmadhikari observed.

On Monday the Justice is likely to decide on the Service Tax department's application to cancel the auction itself.