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In a breather to Satyam Computer Services, the Supreme Court on Wednesday ordered ‘status quo' till Friday regarding the income-tax demand of Rs 617 crore on the company.
Satyam (now Mahindra Satyam) had challenged before the apex court the recent interim order of the Andhra Pradesh High Court directing it to issue a banker's cheque for Rs 350 crore and an unconditional bank guarantee for Rs 267 crore (towards interest on the Rs 350 crore) to the Additional Commissioner (Income Tax), within a week from March 30.
The status quo ordered by the apex court would mean that neither the company nor the tax authorities will be able to operate the amount in the bank account or carry out any transactions therein till Friday, legal sources explained.
In the interim order, the apex court also asked the Additional Commissioner (Income Tax) to submit by Friday the Tax Department's view on the chart submitted by Satyam regarding its actual income and tax liabilities. The Tax Department had raised the demand on the basis of Rs 345 crore worth foreign tax credit availed of by the former management of the company during 2003-09. However, Satyam's current management claimed that the amount was fictitious and was due to the inflation of revenues by its founder Mr Ramalinga Raju.
Earlier this month, the company had reportedly informed the Bombay Stock Exchange that it will submit to the tax authorities the amount (Rs 617 crore) under the foreign tax credit liability, upon which the Additional Commissioner (Income Tax) shall withdraw the garnishee orders issued and defreeze the company bank accounts.
The High Court had said its garnishee orders on Satyam's bank accounts (which amount to freezing of the company's bank accounts) will be lifted only if the company pays the tax amount. Reportedly, Rs 1,300 crore was lying frozen due to the High Court's prohibitory orders.
The High Court had fixed April 20 to hear the matter again.
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