Pay tax dues with 10% interest: SC to Essar Oil

The Supreme Court on Thursday asked Essar Oil to pay Rs 5,189 crore towards its tax liability with 10% interest in eight quarterly instalments,starting January,to the Gujarat government.

Written by Indu Bhan | New Delhi | Published:September 14, 2012 3:47 am

The Supreme Court on Thursday asked Essar Oil to pay Rs 5,189 crore towards its tax liability with 10% interest in eight quarterly instalments,starting January,to the Gujarat government.

A bench headed by Justice A K Patnaik,while disposing of the company’s plea,said that the principal amount would have to be paid in eight quarterly instalments on reducing balance in two years starting January 2 next year.

The interest on the principal amount has to be paid from January 17,2012,when the judgment was pronounced by the apex court.

Essar had earlier sought five years for payment of the balance amount.

The apex court in January had held Essar ineligible for sales tax deferment under an erstwhile Gujarat Capital Investment Premier Prestigious Scheme of 1995 for its Rs 1,900-crore plant at Vadinar in Jamnagar district. Since the refinery started production later than the specified time,the government had held the company ineligible for the benefit.

The company had already paid Rs 1,000 crore towards its sales tax dues of Rs 6,189 crore to the state government in July. But it had refused to pay the interest saying.

The state government had earlier attached three bank accounts of Essar Oil in a bid to expedite the process of recovering sales tax dues of more than Rs 8,200 crore,including interest towards deferred tax liability. Attachment had taken place after the High Court had rejected Essar Oil’s plea seeking to pay the tax dues in eight yearly instalments and exemption from the penalty and interest of over Rs 2,000 crore.

The HC had also allowed the state government to collect the taxes quickly.

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