Cuttack: In a major setback to Odisha government, the Orissa High Court has ordered to keep in abeyance the demand notice that it had issued to Indian Oil Corporation Ltd (IOCL) to recover pending taxes to the tune of Rs 1,485 cr. As per the order, no action can be taken on the matter till further order. However, the court has directed the working group comprising authorities of IOCL, PNG and Odisha government officials to resolve the issue within two months.
Notably, on February 16, 2004, the State government and IOCL had signed an MoU for Paradeep Refinery in which the former had agreed to defer collection VAT on all output from the refinery during the first 11 years of the commencement of the unit. Moreover, the VAT for the concerned period will be treated as loan and IOCL had to start paying VAT from 12th year onwards.
The State government issued notice to IOCL, citing that the refinery owes Rs 1,485 crore for the period beginning with the operationalisation of the refinery in 2015 till December 2016.
Challenging Odisha government’s claim, however, IOCL had moved the High Court.