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Service Tax Department Fails To Sell Vijay Mallya’s Plane For The Fourth Time

The Service Tax Department has failed to get a buyer for the personal jet of beleaguered businessman Vijay Mallya for the fourth time.

This is despite the fact that it cut the reserve price to $12.5 million from the earlier $22.5 million following the Bombay High Court's direction in a related case. Mallya owes around Rs 1,000 crore to the department. He also owes more than Rs 9,000 crore to 17 banks. The businessman left India in March last year and has been living in the U.K. ever since.

Of the service tax claim, Rs 535 crore is the levy on ticket sales, which his now-defunct Kingfisher Airline (KFA) did not deposit with the department after collecting it from the passengers. The remaining amount is interest and other levies. The department had invited global bids for selling off Mallya's personal luxury jet, grounded at the Mumbai airport, for recovery of its dues.

The latest bidding was conducted by Metal Scrap Trade Corporation (MSTC) on March 15-16, a senior official of the department told PTI on Monday, adding it failed despite reduction of reserve price to $12.5 million.

The only bidder who participated in the e-auction was the U.S.-based Aviation Solution LLP which quoted just Rs 17 crore ($2.65 million), the official said. Mallya left the country on March 2, 2016. Indian courts have issued warrants against him in various cases.

Meanwhile, the Karnataka High Court has appointed the Registrar of Companies as an official liquidator in the case related to bank loan default by KFA. The court ordered that all the properties of KFA should be taken over by the official liquidator. The liquidator has written to the Service Tax department, asking to hand over all the properties owned by KFA and attached by the department, the official told PTI.

Apart from Mallya's jet, the department has also attached other properties including seven KFA aircraft, some spare engine parts of aircraft and Kingfisher House.

"We are waiting for the next hearing on the matter by Bombay High Court which is slated for month-end before taking a decision as to whether all the attached properties should be handed over to the official liquidator," the official said.

During the jet's auction in July 2016, a United Arab Emirates-based aviation support company had offered a paltry Rs 1.09 crore against the Service Tax Department's reserved price of Rs 152 crore for the flying machine.