HC asks Essar Oil to Pay Up
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- Current News
- Tuesday, 26 June 2012 15:49
- Published on Tuesday, 26 June 2012 15:49
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Gujarat Global News Network, Ahmedabad
In a move which is bound to mess up Essar Oil’s balance sheet, the Gujarat High court has directed the state government to expedite the recovery of sales tax dues amounting to approximately Rs 9,000 crore from the company.
After the order by the SC asking Essar Oil to pay the sales tax dues to the Gujarat Govt., the company had approached the state government with a request to permit to pay the tax in eight annual installments from April 2013. As the government did not respond, the company moved the HC last month seeking direction to the government to decide on its request. The company also wanted exemption in payment of interest, as well as, the penalty amount which is around Rs 2,000 Crores.
The division bench of Justice P B Majmudar and Justice Mohinder Pal rejected EOL’s petition seeking relief in payment of the Rs 6,414 crore sales tax liabilities. Asking the government to extract the amount from the company as per the SC directions, the HC pulled up the company for its behaviour saying, “We fail to understand as to why the company, which had collected the sales tax from its customers and invested the said amount in its own project, asks for such benefit on equitable grounds.”
The SC order had stated that Essar Oil was not eligible to avail benefit of tax exemption under the ‘Capital Incentive to Premier and Prestigious Unit Scheme 1995-2000’. This was because it did not start commercial production within deadline.
Hence the company indulged in its own enrichment using the money that it owed to the state.
Essar Oil, in a written statement said, it is yet to receive the copy of the order, but once this is received, it plans to take appropriate actions, including appealing before the SC.
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