Income tax dept steps up prosecution of TDS defaults; Naftogaz India MD gets 22-month jail term
A Delhi court sentenced Naftogaz India MD Mahdoom Bava to 22 months in prison for failing to deposit ₹17.69 crore in TDS collected in FY 2009–10.
New Delhi: A Delhi court sentenced the head of an oil and gas services company, Naftogaz India Pvt. Ltd, to nearly two years in prison for failing to pass on taxes deducted at source (TDS) to the government, highlighting a tougher stance by tax authorities against corporate defaults, as per a finance ministry official and court order.
The court of Renu Chaudhary, additional chief judicial magistrate (Special Acts) Central, Tis Hazari Courts, Delhi, on 19 August sentenced Mahdoom Bava, managing director of Naftogaz India, to one year and 10 months' rigorous imprisonment and imposed a fine of ₹10 lakh. The court also imposed a ₹10 lakh fine on the company, to be paid by the official liquidator from the company's assets or funds, subject to the directions of the competent company court or the National Company Law Tribunal (NCLT).
“The case relates ₹17.69 crore worth of TDS during the financial year 2009-10 that the company allegedly did not deposit with the government. At the time of an income-tax survey, the company's cumulative TDS liability for 2010-11 stood at ₹21.22 crore. It was found that the company had sufficient financial resources, including fixed deposits of ₹44 crore during FY 2009-10, to comply with its statutory obligation,” the finance ministry official cited above said.
Further, in a major development, the ACJM’s court also ruled that the offence stands completed upon failure to deposit the TDS within the prescribed period, and that the fact that the company has subsequently gone into liquidation "does not erase the completed offence".
"Likewise, the winding up of the company cannot, by itself, absolve the director whose guilt u/s 278B has been found established," said the order on 19 August.
The judgment assumes significance, as the government has recently challenged a 5 March 2026 order of the Madras High Court that granted relief to telecom company Reliance Jio Infocomm in a dispute over the distribution of goods and services (GST) credits across its various registrations, as reported by Mint.
Bava will face an additional three months in jail if he fails to pay the fine. However, the court has suspended his sentence for 30 days and granted him bail for that period, with the matter listed for 25 September 2026.
Incorporated in 2005 and registered in Delhi, Naftogaz India was engaged in engineering, procurement, and construction (EPC) contracts in the upstream and midstream oil and gas sector, executing projects for clients such as Indian Oil Corp. Ltd (IOCL), Bharat Oman Refinery Ltd, ONGC, and HPCL Mittal Energy Ltd.
The company's LinkedIn profile says it undertakes lump-sum turnkey (LSTK) projects in the oil and energy sector, with core areas including onshore refinery process plants, offshore process & wellhead platforms, cross-country pipelines, and tankage & terminals.
A query sent on Monday evening to the managing director of Naftogaz India and spokesperson of the finance ministry remained unanswered till the press time.
About the Authors
Rituraj Baruah is a special correspondent covering energy, housing, urban affairs, heavy industries and small businesses at Mint. He has reported on diverse sectors over the last eight years including, commodities and stocks market, insolvency and real estate; with previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.
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