Private carrier Jet Airways and Sahara India Commercial Corporation Ltd (SICCL), the owners of erstwhile Sahara Airlines, informed the Bombay High Court on Wednesday that they have failed to arrive to an out-of-court settlement on the tax liability issue after the former purchased Sahara in 2007. The high court had earlier asked both the parties to amicably resolve the matter by July 15.
This is not for the first time the court has suggested Jet and SICCL to settle their dispute. Earlier, both tried but could not find out a solution to their dispute. Justice Dhananjay Chandrachud, who is hearing the case, earlier deferred the ruling after both the parties informed the court that they were too eager to settle the dispute. Jet Airways had sought time till July 9, but the court asked both sides to settle before July 2 or else it would pass an order.
However, SICCL has recently filed a report prepared by Ernst & Young over the valuation of Sahara Airlines, as part of an affidavit. Jet has been asked by the court to respond to this affidavit by July 19. The court also said that it will give further directions in the case by August 5. Jet Airways bought Sahara Airlines in 2007 for Rs 1,450 crore. The Naresh-Goyal promoted carrier paid Rs 900 crore upfront and agreed to pay the balance in four installments. In March 2008, the I-T department demanded tax dues of Rs 107 crore from Sahara Airlines, but Jet refused to pay this amount. Jet said it was due from the Sahara Group, as it pertained to the period before the acquisition.
On March 26, SICCL had filed an application with the court claiming Jet had defaulted on payments towards the purchase of Air Sahara, and had sought permission to seize Jet?s assets. SCCL was demanding the original price of Rs 2,000 crore for the airline it had sold to Jet, instead of the renegotiated price of Rs1,450 crore. Jet Airways bought Sahara Airline Ltd, which operated Air Sahara, in April 2007 and later rebranded it as JetLite. Jet said it had paid SICCL money in installments after making deductions for liabilities before the completion of the acquisition. Claiming that Jet had defaulted on payment of the installment, SICCL sought court direction for attachment of some of the carrier?s movable properties.