The commercial taxes department has issued notice to Essar Oil asking it to pay outstanding sales tax dues of over Rs8,000 crore. The notice follows a recent Supreme Court order that directed the Ruias-controlled company to pay Rs9,100 crore in sales tax to the Gujarat government.
A senior government official confirmed that they had indeed sent a notice to Essar for recovery of unpaid sales tax. However, Essar officials said they have already filed a petition in the matter in the Supreme Court.
Justice Asok Kumar Ganguly of the Supreme Court had held that Essar Oil could not avail of the benefits of the Gujarat government’s New Capital Incentive Policy Scheme as it had not started production at its Vadinar refinery during the qualifying period. The scheme was operational from 1995 to 2000.
The court said that as production at the refinery had not begun when it was qualified for tax exemptions, Essar would have to pay the government its sales tax dues. Payment of the dues had been deferred for the last 13 years.
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