special bench of Justices V Parthiban and Anita Sumanth, counsel for the firm A L Somayaji moved a fresh application suggesting a deal with the department. “Due to seizures and freezing of bank accounts the company is unable to operate its business effectively. Payments to suppliers have been withheld, salaries to over 200 employees were delayed, and several other financial distresses have been caused to over 3,000 employees of the petitioner and its suppliers having a direct impact on the mid-day meal scheme of the state government
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Christy Friedgram moves HC for deal with I-T dept
TNN | Jan 29, 2020, 4:08 IST
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Chennai: Even as an anti-corruption forum has demanded a CBI probe into the alleged Rs 1,500-crore scam in public distribution system (PDS) involving Christy Friedgram, the company has moved the Madras high court offering to cut a deal with the income tax department to prevent further prosecution and attachments in connection with the case.
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The issue pertains to raids conducted by income tax department on July 5, 2018 in various premises of the company. At the end of the searches on July 9, the department alleged that it had unearthed undisclosed income to the tune of Rs 1,350.29 crore by the firm.
Christy group of companies has Tamil Nadu government’s contract to supply eggs, daal and edible oil to the mid-day meal scheme of the state.
Six months after the raids, Christy and its founder TS Kumaraswamy moved the high court to declare the search as illegal, arbitrary and unconstitutional and to prohibit the department from using, divulging or relying upon the material, books of account, documents, electronic records, affidavits and statements seized through the ‘illegal raids’.
On Tuesday, when the seven pleas by Christy came up for hearing before a special bench of Justices V Parthiban and Anita Sumanth, counsel for the firm A L Somayaji moved a fresh application suggesting a deal with the department.
“Due to seizures and freezing of bank accounts the company is unable to operate its business effectively. Payments to suppliers have been withheld, salaries to over 200 employees were delayed, and several other financial distresses have been caused to over 3,000 employees of the petitioner and its suppliers having a direct impact on the mid-day meal scheme of the state government,” Somayaji said. “Therefore, we are volunteering to withdraw all the seven petitions challenging the raids and further proceedings besides depositing Rs 50 crore with the department (Rs 15 crore already seized during raids and Rs 35 crore from Rs 213 crore already deposited with the court as per its order) on two conditions,” the senior counsel said.
“The department must permit us to withdraw the remaining Rs 178 crore deposited with the court and desist from any further attachment of the properties/accounts of the company including initiation of fresh prosecution,” Somayaji added.
Objecting to the conditions to desist from further attachment and initiation of fresh prosecution, the department’s standing counsel AP Srinivas submitted that the estimated tax evasion by the company is about Rs 2,056 crore, adding he need time to get instructions from the department.
Recording the submission, the bench posted the pleas to February 4 for I-T department to submit its response.
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