The A P High Court has granted a three-week stay on the Income-Tax Department freezing the bank accounts of the Visakhapatnam Urban Development Authority. VUDA had approached the High Court after the accounts were frozen by the IT Department for failure to pay tax of about Rs.200 crore on bulk land auctions carried out by it in 2008-09 financial year.
The relief was granted by Chief Justice M.B. Lokur. VUDA contended that it was not taxable as it mobilised resources for budgetary support to the State government. It also stated that the due procedure was not followed and facts were not considered while taking the decision to freeze its accounts.
VUDA had deposited Rs.1,180 crore realised from bulk auction in the treasury account of the State government.
