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Our stays deprive Govt of dues, help Adani, Essar and Vedanta: Supreme Court

The Supreme Court Friday noted that its interim orders in favour of big corporate groups such as Vedanta, Adani and Essar may have blocked thousands of crores that could have been used by governments for public welfare.

IN its first such acknowledgment, the Supreme Court Friday noted that its interim orders in favour of big corporate groups such as Vedanta, Adani and Essar may have blocked thousands of crores that could have been used by governments for public welfare.

“Matters are pending before this court because they have been referred to larger benches. There are stay orders of this court in favour of big companies like Essar and Vedanta at the cost of poor states like Orissa where this money could have been utilised for various schemes,” observed a bench headed by Chief Justice of India T S Thakur.

Indicating that it was inclined to review all such orders that may have been eventually working in favour of the companies because the point of law was pending adjudication, the bench, also comprising Justice Uday U Lalit, said it would want to estimate the gravity of the problem since money that was due to various public authorities was stuck for a very long time.

The bench was hearing a plea by the National Aluminum Company Limited (NALCO), which wanted a favourable order from the court regarding payment of entry tax on imported goods in Orissa.

The NALCO counsel had cited a 2013 order by the court whereby companies like Vedanta, Essar and Adani were asked to pay only 50 per cent of the total tax demand since 2008. In its interim order, the apex court had also excluded the penalty amount after underlining that the legal issues pertaining to validity of entry tax had been referred to a nine-judge Constitution Bench.

Orissa’s Entry Act, which permits levy of entry tax on imported goods, allows the state to levy a tax, not exceeding 12 per cent of the purchase value, on entry of goods for consumption, use or sale in the state. The validity of this law has been challenged by a clutch of companies.

On Friday, when NALCO requested the bench to let it also deposit only 50 per cent of the total tax demand, the bench sought to know the quantum of money that had been prevented from coming to the Orissa government’s coffers because of its order three years ago.

“We would want to know how much is the total outstanding on these companies? What should have been the total money deposited by them with the state government? We have difficulties in constituting a nine-judge bench but stay orders like this cannot act for years together in favour of companies like Essar and Adani,” remarked the bench.

It added: “We are inclined to vacate the stay order. We may ask all the companies to pay the total tax demand and penalty amount can be excluded till we decide the matter finally.”

The court directed counsel for the Orissa government to ask Chief Commercial Tax Commissioner from setting out details of entry tax owed to all the companies and clarified the officer will have to show up personally if he fails to submit the records by April 1.

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