Supreme Court directs Essar Oil Ltd to pay sales tax to Gujarat government

The Supreme Court today directed Essar Oil Ltd  to pay sales tax dues of Rs5,165 crore in eight quarterly instalments to the Gujarat government.

A bench comprising justice A K Patnaik and justice Swatanter Kumar said the amount had to be paid with an interest of 10 per cent with effect from 17 January, 2012.

The company has been directed to pay the first installment before 2 January, 2013.

The order was passed after the company sought a period of three years at the minimum to pay the dues even as the Gujarat government sought the payment of dues within six months.

Essar Oil on 17 July offered to pay to Gujarat government the sales tax liability of Rs 6,169 crore in installments with the first installment of Rs1,004 crore to be deposited by 30 July.

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

The state government's demand for around Rs1,800 crore as interest for the period upto 17 January, 2012 was rejected by the court.

Essar Oil Ltd had approached the apex court against the order of the Gujarat High Court which had rejected relief it sought of making the payment in installments.