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Essar Oil’s 3 accounts frozen in Rs. 8000-cr case

HT Correspondent , Hindustan Times   Ahmedabad , July 10, 2012
First Published: 01:33 IST(10/7/2012) | Last Updated: 01:42 IST(10/7/2012)

The Gujarat government froze three bank accounts of Essar Oil Ltd of the Rs. 1.5-lakh-crore Essar Group on Monday, taking the first step to recover Rs. 8,414-crore sales tax dues.


The action comes two weeks after the Gujarat high court rejected a petition by Essar Oil to be allowed to pay Rs. 6,169 crore in eight yearly instalments.

The company, however, said in a press release: “Essar Oil has already agreed to pay Rs. 1,000 crore within 30 days to the Gujarat government towards the sales tax liability.”

The company also wrote to the state, asking for a committee to jointly discuss the modalities of paying the balance principal amount and consider waiver of interest payments.

The high court had rejected the company’s appeal for waiver of penalty and interest payments. In January, the Supreme Court rejected the company’s plea for sales tax deferment benefits under a special state government programme to attract investments.

The company lost the eligibility for tax deferment incentive as it failed to begin operations at its Vadinar oil refinery by April 2003. Although the project went on stream in 2006, the company utilised the benefits, which the state government now wants it to repay.

On the Bombay Stock Exchange, the Essar Oil share went down by 2.34% to Rs. 56.35 from Rs. 57.70.

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