Essar Oil to pay sales tax to Guj Govt in 8 installments: SC

New Delhi: Essar Oil Ltd was Thursday directed by the Supreme Court to pay sales tax dues of Rs 5,165 crore in eight quarterly instalments to the Gujarat Government.

A bench comprising justices A K Patnaik and Swatanter Kumar said the amount has to be paid with an interest of 10 percent with effect from Jan 17, 2012.

The bench asked Essar Oil to pay the first instalment before Jan 2, 2013.

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

Essar Oil on July 17 had offered to pay to Gujarat government the sales tax liability of Rs 6,169 crore in instalments. The first instalment of Rs.1,004 crore was deposited by July 30.

The court on August 29 had kept the matter for deciding the question as to whether the company would be liable for interest for the period from April, 2008 onwards on the tax amount. |

Gujarat government's demand for around Rs.1,800 crore as interest for the period upto January 17, 2012 was rejected by the court.

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 instalments.

Essar Oil had availed Gujarat government's 'Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000' for its Rs 1900-crore Vadinar plant in Jamnagar district as a 100 percent export-oriented unit for refining of petroleum products with a capacity of 9 million tonnes per annum.

The Supreme Court had in April this year refused to review its January 17 judgement which quashed the Gujarat High Court's order allowing Essar Oil Ltd to pay Rs 6,169 crore sales tax liability in deferred instalments and extended the time period of the state government's tax incentive scheme.

The apex court had delivered the verdict on the petition by Gujarat government challenging the 2008 high court order which had allowed Essar's plea on the issue.

PTI