SC allows show-cause notice against MakeMyTrip
Delhi HC had ruled that arrest of an executive without notice was illegal
The Supreme Court on Tuesday allowed the Directorate General of Central Excise and Intelligence (DGCEI) to issue a show-cause notice against online travel portal MakeMyTrip within four weeks.
Earlier this month, the Delhi High Court had ruled that the arrest of an executive of the travel portal, without issuing a showcause notice, was illegal. The court had also asked the department concerned to prosecute its own officer for the arrest. In turn, the government had challenged the ruling in the Supreme Court.
The government had earlier filed a service tax evasion case against MakeMyTrip. Its vice-president (finance) M K Pallai was arrested and the government had demanded an initial deposit against tax arrears, reportedly amounting to about ~70 crore. According to DGCEI, the portal had collected service tax to the tune of ~82.78 crore from hotels and other service providers till September 2015, but deposited only ~15.34 crore. However, during the investigation, MakeMyTrip deposited ~70 crore.
During the arguments in the court on Tuesday, Attorney General Mukul Rohtagi, who appeared on behalf of DGCEI, raised questions on issuing a notice before arresting the accused.
For the defence, former finance minister P Chidambaram said a full stay on the high court order should not be granted and asked the department to refund ~67.44 crore. He said MakeMyTrip had deposited the amount under coercion and threat of arrest, and it was tax terrorism.
The court will hear the case next on 9 November.