According to sources, for the said assessment year, the minimum alternate tax (MAT) was leviable on MSEB under section 115JA of the IT Act which raised a demand of Rs 50 crore.

However, MSEB did not honour even the proposal for payment of the sum in graded instalment and filed a writ petition in the Mumbai High Court and obtained a stay on the recovery for six weeks, from the date of the appellate order.

Subsequently, the appellate commission confirmed the assessment and stay order of the High Court was operative only upto February 28, 2001. Meanwhile, following the first appeal order in case of assessment year 1997-98, two more assessment years - 1998-99 and 1999-2000 - were finalised and demands outstanding figured around Rs 206 crore.

This forms the IT demand of around Rs 50 crore for the year 1997-98, Rs 43 crore for 1998-99, and Rs 68 crore for 1999-2000, along with interest of Rs 24 crore for 1998-99 and Rs 18 crore for 1999-2000 under section 234B.

After the stay got over, the IT department, acting as per the High Court order, went ahead with attaching the fixed deposits which were terminated to realise Rs 157 crore. In addition to this, fixed deposits worth Rs 25 crore are at present under attachment, but recovery is yet to be done. According to observers, MSEB, which is already reeling under turbulence with the Dabhol Power Corporation (DPC) controversy, will be further impacted on account of this action.