Essar Oil moves SC for extension of time to pay sales tax dues

Last Updated: Friday, October 4, 2013 - 20:46

New Delhi: Essar Oil Ltd on Friday 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.

"We will see to it," a bench of justices A K Patnaik and J S Khehar said. It asked the counsel for the state government to take instruction on the plea of the company and ordered listing of the matter for hearing on November 11.

Senior advocate Mukul Rohatgi, appearing for the firm, said the state government may be asked not to take coercive steps, like locking down the Vadinar refinery, as nearly 10,000 people are employed there.

"Almost all state governments are giving huge incentives to firms which are in the business of refineries and power generations," he said.

"Currently there is a slowdown in the world economy and there is also volatility in rupee and crude prices. The applicant (Essar Oil) has almost fully exhausted its sanctioned working capital limits and it is finding it exceedingly difficult to raise additional working capital finance necessary to carry on its day-to-day business operations," the company said in its application.

Essar Oil 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 has 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 percent 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 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.


First Published: Friday, October 4, 2013 - 20:46

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