Tulip Telecom hit a lower circuit limit of 5% to Rs 4.02 at 11:36 IST on BSE on reports the company's chairman-cum-managing director has been arrested for allegedly evading service tax of about Rs 32 crore.
Meanwhile, the BSE Sensex was up 32.42 points, or 0.15%, to 21,772.51.
On BSE, so far 55,000 shares were traded in the counter, compared with an average volume of 1.68 lakh shares in the past one quarter.
The stock opened with downward gap, falling by the maximum 5% daily circuit and remained locked at the 5% level at Rs 4.02 so far in the day. The stock hit a record low of Rs 3.56 on 24 February 2014. The stock hit a 52-week high of Rs 23.70 on 6 May 2013.
The stock had outperformed the market over the past one month till 20 March 2014, rising 9.02% compared with the Sensex's 5.86% rise. The scrip had, however, underperformed the market in past one quarter, sliding 32.54% as against Sensex's 3.13% rise.
The small-cap company has an equity capital of Rs 29 crore. Face value per share is Rs 2.
According to reports, a case has been registered against Tulip Telecom for non-payment of service tax. Investigations by Delhi Service Tax Commissionerate found that the firm, which is engaged in providing Internet services among others, was not filing its mandatory returns of the central levy from 2012-13, reports suggested.
Service Tax Commissionerate officials arrested Lt Col (Retd) HS Bedi, chairman-cum-managing director (CMD) of Tulip Telecom on Tuesday, 18 March 2014, on charges of non-payment of tax even after collecting it from its consumers. The estimated alleged service tax evasion by the company is Rs 32.16 crore, reports said.
As per reports, Bedi, who was produced before Patiala House Court on Wednesday, 19 March 2014, has been sent to judicial custody for 14-days.
Reports sugested that an evasion of service tax of Rs 50 lakh and above has been made a cognizable offence after the passage of 2013-14 Finance Bill on 10 May last year.
On a consolidated basis, Tulip Telecom reported net loss of Rs 154.34 crore in the quarter ended June 2013 compared with net profit of Rs 117.94 crore in the quarter ended June 2012. Net sales fell 64.6% to Rs 253.42 crore in the quarter ended June 2013 over the quarter ended June 2012.
Tulip Telecom is a data telecom services and an IT solutions provider.
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