Home > News > Jaypee wants to recover Rs 24 crore back from dead Rs 2k crore BIC | India News

Jaypee wants to recover Rs 24 crore back from dead Rs 2k crore BIC | India News


NEW DELHI: The Rs 2,000 crore Formula One racing facility at Buddh International Circuit near Greater Noida is defunct and sealed, but the owners Jaypee Sports International moved the Supreme Court on Thursday to gather the crumbs as it sought refund of Rs 24 crore it had deposited with the court way back in 2011.
The opening edition of the F-1 race in 2011 at BIC saw frenzied response. It was attended by Vijay Mallya, who had not been declared fugitive by India yet. The UP government, intending to popularise motorsports in India, had exempted the event entertainment tax. But, one Amit Kumar filed a PIL in the SC challenging the exemption of entertainment tax to the event on the ground that motorsports has no socio-economic connection with the ground reality in India.
The SC on October 21, 2011 had directed Jaypee Sports to deposit within two weeks “in a Non-Lien Account the amount of entertainment tax payable in terms of Section 3 of the UP Entertainment and Betting Tax Act, 1979, without taking into consideration the impugned exemption notification”. Jaypee deposited a little over Rs 24 crores.
Sebastian Vettel won the inaugural edition of F-1 race at BIC and retained pole positions in the next two in 2012 and 2013. Much to the consternation of Jaypee, the enthusiasm of motorsports lovers dwindled fast. The footfalls nosedived for the next two editions so did the revenue. To make matters worse, Jaypee got mired in tax issues. It found it extremely difficult to even pay annual licence fee to F-1 organisers and chances of recovering the huge investment in BIC appeared remote. The circuit closed down.
Ironically, India’s first and the only Formula One infrastructure is now sealed by Yamuna Expressway Industrial Development Authority (YEIDA), allegedly over Jaypee Infrastructure Limited’s inability to clear financial dues. YEIDA is reportedly planning to float a global tender to auction the complex to recover the dues.
Appearing for Jaypee Sports International, senior advocate Arvind Datar told a bench of Chief Justice S A Bobde, and Justices A S Bopanna and V Ramasubramanian that the money lying in the non-lien account opened by the SC should be returned to his client as the events were exempted from entertainment tax.
This plea was opposed by senior advocate R K Raizada, who appeared for the UP government. He said the state government has withdrawn the notification exempting the event from entertainment tax. “There is no question of refund,” he said.
While opining that PIL on this issue was untenable, the bench said it would be appropriate if the appropriate statutory authority held an inquiry and submitted a report to the SC on whether Jaypee Sports International collected entertainment tax in the tickets it sold for the F-1 events. The bench allowed Jaypee to present evidence before the authority, which it said would submit a report in four weeks.

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