In a setback to Jetlite (India) Ltd (formerly Sahara Airlines Ltd), the Supreme Court on Monday dismissed the airline?s plea challenging the Delhi High Court order that asked Jetlite to predeposit Rs 60 crore and give a bank guarantee of Rs 10 crore before the sectoral tribunal entertained its appeal.
In order to entertain the appeal itself, the Customs, Excise & Service Tax Appellate Tribunal had earlier insisted that of the total service tax demand of around Rs 258 crore, the company should deposite Rs 100 crore as a pre-deposit pending final settlement. Jet bought Air Sahara in April 2007 for Rs 1,450 crore and later rebranded it to JetLite. Of this purchase price, Jet had paid Rs 900 crore in instalments by April 20, 2008. The tax demand was raised on the basis of the operations of the earlier Air Sahara, before its takeover by Jet. The department stand is that Sahara Airlines (now JetLite) was promoting the real estate and housing business and area operations of Sahara India Commercial Corporation Ltd (formerly Sahara India Housing).
Passengers of the airline were targeted as potential customers to promote the business of the housing projects, the authorities said.