Essar Oil dips on rejection of sales tax recovery plea

High Court has directed the state government to expedite the recovery, including interest and penalty

Essar Oil is trading lower by 4% at Rs 53.10 on reports that the Gujarat High Court (HC) has directed the state government to expedite the recovery of the company’s sales tax deferral liability of about Rs 8,000 crore, including interest and penalty.

“Essar Oil is yet to receive the copy of the order. But once this is received, the company plans to take appropriate actions, including appealing before the Supreme Court of India,” the company said in a reaction to this order.

“Essar Oil is also in advanced discussions with Indian lenders with regard to putting in place a $1-billion (about Rs 5,000 crore) loan facility as a contingency measure for use in the event that the sales tax liability becomes payable immediately or that Essar Oil is not able to negotiate a satisfactory repayment schedule. We expect this facility to be finalised shortly,” Essar said in a regulatory filing.

The stock opened at Rs 53.25 and hit a low of Rs 52.95 on the National Stock Exchange. A combined 1.04 million shares have changed hands on the counter in morning trades on both the exchanges.