Tribunal order results in liability of Rs. 1,600 crore income tax for the corporation

The Income Tax officials on Friday got the bank accounts of the A.P. Beverages Corporation Limited (APBCL) frozen over liability of income tax payment.

Officials of the I-T Commissionerate-1 of Hyderabad went to different banks in the city and got the corporation’s accounts frozen, sources said. The I-T officials were led by senior IRS officer B.V. Prasad Reddy.

The APBCL and the I-T Department were engaged in a legal battle over payment of income tax.

The corporation, which is the sole agency of the State government having rights to sell liquor to wine shops, bars and clubs, was transferring thousands of crores of rupees in the form of liquor sale proceeds to the exchequer.

When the I-T officials served notices to the corporation to pay tax on the income it accrued through liquor sale, the latter contended that it was an organ of the State and hence not liable for tax.

Differing with the claims of the corporation, the I-T Department maintained that the former was not sovereign and liable for tax like any other corporation.

The I-T officials subsequently made it clear to the corporation that it had to pay tax running into hundreds of crores of rupees for the past years.

Meanwhile, the Excise Act was amended retrospectively stating that the entire sale proceeds of liquor secured by the corporation belonged to the government and hence was not taxable.

HC declines stay

As the I-T authorities raised huge demands of tax for different years, the corporation went to the appellate authorities but had to pay Rs. 240 crore during 2012-13 to I-T Range-1 as the High Court declined to stay the demand for I-T payment in toto.

The High Court had also asked the Income Tax Tribunal to dispose the case expeditiously.

The tribunal had disposed the case a week ago and its order resulted in the liability of Rs. 1,600 crore income tax for the corporation, sources added.

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