SC refuses relief to BPCL in tax dispute with Kerala government
29 May 2010
The Supreme Court has refused to grant interim relief to state-owned oil marketing firm Bharat Petroleum Corporation Ltd (BPCL) in its dispute over a tax demand raised by the Kerala government.
The state-run oil firm had moved the SC terming a newly introduced section 17-D of the Kerala Value Added Tax Act' as 'unfair.
By enacting section 17-D, BPCL alleged, the state government had taken away its rights existing prior to the introduction of the impugned provision, which obliged an aggrieved party to deposit the entire assessed tax amount, even if it is disputed, as a precondition for filing an appeal before the appellate forum.
The SC bench has issued limited notice to the Kerala government on "the question of validity of Section 17-D of the Kerala Value Added Tax Act", bur refused to stay the high court judgment that directed fresh assessment.
The matter will come up for hearing on 22 July.
BPCL said the rider in section 17-D introduced by the Finance Act, 2007 disentitled a party from pursuing the right of appeal against a wrong assessment order.
"The high court erred in not appreciating that there was no justification in proceeding to complete the assessment under Section 17D of the KGST Act," BPCL said in its petition.
Senior counsel CA Sundaram, appearing for BPCL, said that the oil firm had filed Form II before the state commercial authorities conceding total inter-state sales turnover of Rs267.8 crore for 2001-02.
BPCL, meanwhile, reported an 81 per cent drop in its net profit for fiscal fourth quarter ended 31 March 2010, at Rs703.18 crore, against a net profit of Rs3,628 crore in the corresponding period of the previous fiscal.
The company's sales revenue from operations rose 42 per cent to Rs37,550.90 crore during the period. However, it incurred some losses on selling petrol and diesel below cost in 2009-10. Sales receipts of Rs5,265.03 crore from selling LPG and kerosene could compensate some losses, the company said.
BPCL, one of India's largest PSU companies, is ranked 287 in Global Fortune 500. The company has shown tremendous growth for the past few years and is well placed in reputed benchmarks like Fortune 500 & Forbes 2000 listings.