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• In a major blow to Essar Oil, the Supreme Court on Tuesday asked the Ruias-controlled company to pay Rs9,100 crore in sales tax to the Gujarat government.Justice Asok Kumar Ganguly held that Essar Oil could not avail benefit of the Gujarat government’s New Capital Incentive Policy Scheme, which was operational from 1995 to 2000, as it had not started production at its Vadinar refinery during the qualifying period.The court said that Essar had not begun production at the refinery when it was qualified for tax exemptions, and so it would have to pay the government its dues. The sales tax had been deferred for the last 13 years.Essar Oil argued that it failed to start production at its refinery on time due to the 1998 cyclone. However, the Apex Court did not buy the argument, and asked the company to pay the sales tax dues.Essar Oil shares plunged close to 8% following the SC verdict. As against Monday’s closing of Rs63.05, the company’s share closed at Rs58.10 on the BSE on Tuesday.

• The case dates back to 2008 when Congress had charged the state government of giving tax benefit of 125% to Essar Oil under the scheme. The Congress had alleged that the state exchequer was losing around Rs10,000 crore if the tax exemption continued.The case reached the Gujarat high court, which ruled in favour on Essar Oil. However, the state government had appealed against the high court verdict in Supreme Court.The company had provided for Rs4,800 crore as a part of deferred sales tax and has to provide for additional Rs4,300 crore to the state government. Essar Oil said that it would provide further information in the matter after studying the SC judgement. The company, however, said that it had availed sales tax benefit of approximately Rs6,300 crore which was to be paid in deferred installments. Meanwhile, leader of opposition, Shaktisinh Gohil said that Supreme Court had rightly observed that Essar Oil was wrongly offered incentives.

•  "The Narendra Modi government has been favouring industrialists, and this has been proved in the Supreme Court," he said reacting to the SC order. Gohil also said that a sustained campaign by the Congress in the assembly had forced the state government to appeal the Gujarat HC order. On the other hand, the state government accused Gohil of falsely claiming credit for the SC decision.Energy minister Saurabh Patel said that the Supreme Court had ruled in the government's favour due to its effective representations. "The state government had taken all legal steps and vigorously pursued the matter. The Leader of Opposition is resorting to lies to claiming the credit for the decision," Patel said.

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