Ruias get no relief in Rs 6,300 cr case
28 Jun 2012 11:56 AM GMT
Essar Oil Ltd has failed to get any respite from the Gujarat high court on the payment of sales tax of about Rs 6,300 crore rupees. The court did not accept the Essar petition for restraining the Gujarat government from recovering the amount from it.
Essar Oil is now exploring various options, including appealing to the Supreme Court, and preparing a war chest of over Rs 5,000 crore in case it has to meet the sales tax liability immediately or the company is not able to work out a satisfactory payment schedule.
In a communication to the stock exchanges, Essar Oil said that the High Court of Gujarat hearing in relation to its writ petition seeking direction on repayment of sales tax took place on Monday and 'the petition has not been favourably considered by the High Court'.
Essar Oil had approached the court on 7 May to seek direction on the repayment instalments and interest in relation to its sales tax deferral liability to the Gujarat government. Interestingly, it said that in December quarter of 2011 it had already adjusted the liability in the accounts.
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The company has been grappling with the sales tax issue for a while. Already on 17 January 2012, the Supreme Court had set aside an earlier judgement of the Gujarat high court by which Essar Oil was allowed to use the Sales Tax Deferment Scheme, that is, to pay sales tax to the Gujarat government in deferred instalments. The company had availed itself of approximately Rs 6,300 crore of sales tax benefit as of December 2011, which was to be paid in deferred instalments, Essar Oil had said.
Essar Oil is now exploring various options, including appealing to the Supreme Court, and preparing a war chest of over Rs 5,000 crore in case it has to meet the sales tax liability immediately or the company is not able to work out a satisfactory payment schedule.
In a communication to the stock exchanges, Essar Oil said that the High Court of Gujarat hearing in relation to its writ petition seeking direction on repayment of sales tax took place on Monday and 'the petition has not been favourably considered by the High Court'.
Essar Oil had approached the court on 7 May to seek direction on the repayment instalments and interest in relation to its sales tax deferral liability to the Gujarat government. Interestingly, it said that in December quarter of 2011 it had already adjusted the liability in the accounts.
Â
The company has been grappling with the sales tax issue for a while. Already on 17 January 2012, the Supreme Court had set aside an earlier judgement of the Gujarat high court by which Essar Oil was allowed to use the Sales Tax Deferment Scheme, that is, to pay sales tax to the Gujarat government in deferred instalments. The company had availed itself of approximately Rs 6,300 crore of sales tax benefit as of December 2011, which was to be paid in deferred instalments, Essar Oil had said.
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