Taxman set to approach SC against Sesa-Sterlite merger

Posted online: Saturday, Jan 25, 2014 at 0000 hrs
Anil Agarwal’s troubles don’t seem to end. After the taxman did a ‘survey’ of Cairn India’s books to see if any taxes were due from UK’s Cairn Energy for its 2006 transfer of Indian assets, the tax department plans to approach the Supreme Court to contest critical aspects of the Sesa Goa-Sterlite merger. Though the taxman’s appeal has been rejected by the Bombay High Court, it plans to approach the Supreme Court through the ministry of corporate affairs (MCA), reports Amitav Ranjan in New Delhi.

The high court had rejected the taxman’s plea on grounds it had no locus standi, and the Supreme Court said any objection would be entertained only if the MCA files a special leave petition (SLP). The taxman has approached the MCA and, on January 15, MCA’s legal adviser okayed the filing of the SLP.

The taxman’s contention is if the merger date is taken as the time the high court cleared the merger, the tax department will not have to refund the entity R1,500 crore — but since the merger was done with retrospective effect, the amount will need to be refunded.

On the same day — January 15 — that its legal adviser okayed the decision to file an SLP in the SC asking for a change in the effective date of the merger, the MCA issued a circular saying none of its regional directors would be allowed to give a go-ahead for mergers without asking the taxman for its view.

Amitav Ranjan