Bombay HC: Remove Airbus A319 seized from Kingfisher Airlines from city airport

The Bombay High Court on Monday said the Airbus A319, under the custody of the service tax department and parked at Mumbai airport since 2013, must be removed at the earliest. The service tax department had seized the aircraft from the now-defunct Kingfisher Airlines in 2013 following its management's failure to clear dues worth Rs 1,000 crore.

It included Rs 533 crore in principal amount and the rest in interest and penalties, which the airline had collected from passengers but did not deposit with the tax authorities. Efforts by the department to find a buyer four times in the past was unsuccessful. A bench of justices S C Dharmadhikari and Bharati Dangre directed the official liquidator of the Karnataka High Court, who has been in charge of the assets and books of Kingfisher Airlines, to take the required steps to take away the plane.

"The aircraft has been occupying space at the Mumbai airport for the past five years. If it is not airworthy then remove it immediately from the airport," the bench said. The direction came after the service tax department told the court that it has failed to sell or auction the aircraft that has been parked at Mumbai airport ever since it was seized by the department in December 2013.

The department has tried in vain to auction the aircraft four times as the bids were much below the reserved price. The auctions failed despite the fact that the reserve price was cut to USD 12.5 million from the earlier USD 22.5 million upon the HC's direction in the past. In a previous hearing, the Mumbai airport had told the court that the Airbus A319 had depreciated in value and should be sold as scrap to recover the dues that Vijay Mallya, who owned the Kingfisher Airlines, owes to the department.

Mallya owes around Rs 1,000 crore to the service tax department. He also owes more than Rs 9,000 crore to 17 banks. The department had invited global bids for selling off Mallya's personal luxury jet, grounded at the Mumbai airport, for recovery of its dues. The latest bidding was conducted by MSTC on March 16, 2017, a senior official of the department had said. The only bidder who participated in the e-auction was the US-based Aviation Solution LLP which quoted just Rs 17 crore
(USD 2.65 million), the official had said.

Mallya had fled the country on March 2, 2016. Indian courts have issued warrants against him in various cases.

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