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Vijay Mallya’s private jet to be re-auctioned by service tax dept

MUMBAI: The Bombay High Court, on Monday, allowed successful bidder SGI Commex Ltd to withdraw its bid on the auction sale of the corporate jet owned by Vijay Mallya.

Vijay Mallya

A division bench of Justice S C Dharmadhikari and Justice B P Colabawala allowed the company to withdraw after it filed an affidavit in high court seeking the same. It was argued that the reserve price for the sale was not mentioned by the service department and thus anyone could participate in the auction. Further, the company’s counsel argued that it did not want to purchase a plane, the sale of which was not transparent.

Earlier, the department had moved the high court seeking to recall its order allowing the sale to SGI Commex Ltd. It was argued by the Additional Solicitor General, Anil Singh, that the bidder SGI Commex Ltd’s offer price is 81.08% below the reserve price and thus as per the draft disposal manual it cannot be allowed to have such low price auction. The maximum lowest bid allowed is up to 20% below the base price.

The Airbus 319, once owned by Vijay Mallya, is languishing at Mumbai airport which was attached by the service tax department in lieu of tax dues pending from April 2011 to September 2012.

After four failed attempts at auction, the tax department received a purchaser who agreed to bear expenses to make the plane flight worthy and clear it at the earliest. On those grounds, the department had made a plea to the court to allow the sale, stating that it had found the highest bidder who had quoted a price of $4.1 million (Rs 27.39 crore). The high court then passed its order on August 22 allowing the sale of the jet.

The court had during the previous hearing said, “The delay is costing airport authorities as the plane continues to occupy the space. The court also warned that it would make the department and the auction purchaser pay the cost along with interest for this wrongdoing.”

The court has now posted the matter for further hearing on October 6, when the department would put forth the re-auction schedule.

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