The Centre on Tuesday told the Supreme Court that an investigation was being carried out by the Income Tax Department into an alleged money laundering issue raised during hearing of pleas seeking cancellation of Reliance Industries Ltd's contract for exploration of oil and gas from Krishna-Godavari basin.
Solicitor General Mohan Parasaran, who was making submission before a bench headed by Justice B S Chauhan, said the probe by the Central Board of Direct Taxes was still under progress.
Advocate Prashant Bhushan, appearing for an NGO, Common Cause, had read out the letter by the Indian High Commission in Singapore to the Centre relating to an investigation of investment of Rs 6,500 crores from a "one-room defunct" company in Singapore.
He had claimed the High Commission had stated that Rs 6,530 crores have come into India from Bio Metrix Marketing Ltd, a one-room company in Singapore that does not do any business.
It was contended by him that it was a company with no assets, no equity and did not file income tax returns in Singapore claiming to be a small firm.
Mr Parasaran, who commenced his arguments today, said the allegations of collusion between the government and RIL were "wholly unfounded".
He submitted that there was a dispute between the government and RIL over fall in output and cost recovery from KG basin for which the apex court had on Monday appointed an international arbitrator as the third member in the arbitration panel.
"How can dispute between two parties going on under arbitration be raised and entertained in a PIL (public interest litigation)," Mr Parasaran said, while referring to the issues raised in the petition filed by CPI MP Gurudas Dasgupta.