Govt sets aside Rs617 crore tax demand on Satyam

Attorney General Goolam E Vahanvati, appearing for the CBDT, told the apex court that it would recall its 10 March order, demanding Rs617 crore in tax and decide afresh on the actual tax liability of Satyam Computer. The bench, however, refused Satyam's plea to defreeze its bank account worth Rs1,300 crore

New Delhi: The government today informed the Supreme Court that it will set aside its order directing scam-hit information technology (IT) firm Satyam Computer to pay Rs617 crore as income tax and will give a fresh hearing to the firm's plea challenging the tax demand, reports PTI.

Attorney General Goolam E Vahanvati, appearing for the Central Board of Direct Taxes (CBDT), told the apex court that it would recall its 10 March 2011 order, demanding Rs617 crore in tax and decide afresh on the actual tax liability of Satyam Computer, now known as Mahindra Satyam.

"We would set aside the 10 March 2011 order. We would give them a hearing and pass a well-reasoned order," Mr Vahanvati told a three-judge bench headed by Chief Justice SH Kapadia.

The bench, however, refused Satyam Computer's plea to defreeze its bank account worth Rs1,300 crore.

Counsel appearing for Satyam Computer submitted that the company urgently needs some money because as per a negotiation it has to pay a huge amount to the US Securities Exchange Commission.

Mr Vahanvati, however, opposed the plea, saying the company already has cash reserves of Rs1,800 crore. "Let the money remain with us. If after that revised process if they are entitled, we will refund them," said Mr Vahanvati.

Based on this position, Satyam's counsel requested the apex court to put the money in an escrow account.

In response, the bench assured the IT firm saying its interest would be protected. "You would be protected. Right now your main grievance is that you were not heard by the CBDT. It is over," the bench said while directing the matter of defreezing Satyam Computer's account for listing on Monday.

The apex court was hearing a petition filed by Satyam Computers challenging Andhra Pradesh High Court's order directing it to deposit Rs350 crore along with a bank guarantee of Rs267 crore to the tax authorities.

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