In a set back to Kingfisher Airlines Ltd (KAL) head Vijay Mallya, the Karnataka High Court on Saturday refused to quash criminal proceedings initiated against him by the Special Court for Economic Offences in Bangalore for not remitting the tax deducted at source (TDS) to the Government.

While refusing to accept Mallya’s contention that he cannot be treated as a principal officer responsible for remitting TDS, the Court made it clear that, “It is open for the I-T Department to proceed against the company, its directors, and any other principal officer or officers responsible for default.”

“There is no bar on treating more than one officer as principal officer for criminal prosecution,” the Court observed while rejecting Mallya’s claim that proceedings against him cannot be continued as the department recently had arraigned T.R. Venkatadri, KAL’s Assistant Vice-President (Regional Accounts South and Taxation) as a Principal Officer in these proceedings.

Justice H.N. Nagamohan Das delivered the verdict, while dismissing petitions filed by the company and Mallya. The I-T Department had filed three cases during February-March 2013 after the company failed to remit TDS amount for 2009-10, 2010-11 and 2011-12, respectively.

While the total TDS claimed by the department is around Rs 400 crore, the company had remitted only a portion of it. With this, the stay order issue by the High Court in August 2013 on proceedings before the Special Court stands vacated.

“Criminal proceedings are independent of recovery proceedings under Section 276B of the I-T Act. Hence, pendency of recovery proceedings cannot not be a legal impediment to continue criminal prosecution,” the Court said.

Justice Das also noted that Mallya and other company representatives had written eight letters between November 2011 and March 2012 admitting deduction at sources, failure to credit it to the Government’s accounts, and had pleaded some time to pay the amount.

The department had also produced before the Court the three letters, written by Mallya using his official letterhead as a Member of Parliament, Rajya Sabha, on behalf of the KAL in this regard.

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