SC dismisses Essar Oil plea on Gujarat sales tax dues

New Delhi, 11 November 2013

Supreme Court today dismissed plea of Essar Oil Limited seeking extension of time for paying outstanding sales tax dues to Gujarat government.

In October this year Essar Oil Ltd moved the Supreme Court seeking more time for paying outstanding sales tax dues to Gujarat government on the ground that it is facing financial constraints due to economic slowdown and not given tax benefits unlike other refineries.

Essar Oil had also sought a direction to the state government to form a three-member committee to make recommendations for extending a viability support package to it for ensuring that it continues to carry on its business as a growing concern.

It had sought a direction to the state government not to take any coercive action against the company for non-payment of the sales tax dues.

In January 2012, Essar Oil had lost the case on rebate of Rs 6,165 crore sales tax dues. The company paid Rs 1,000 crore then and in September 2012 the apex directed it to pay the remaining Rs 5,165 crore in eight quarterly installments with an interest of 10 per cent applicable from January 2012.

Essar Oil said that it has paid Rs 2,941 crore of tax dues and Rs 756 crore of interest but is now unable to pay the fourth installment.

Earlier, the apex court had directed the company to pay sales tax dues of Rs 5,165 crore in eight quarterly instalments to the Gujarat government.

The order was passed after the company sought at least three years time to pay the dues. The Gujarat government had sought the payment of dues within six months.

Essar Oil Ltd had approached the apex court against the order of the Gujarat High Court which had refused any relief to it for making the payment in installments.