Rain drops sit on the window of a pilot boat in view of a mobile offshore drilling unit (Photographer: Matthew Lloyd/Bloomberg)  

Supreme Court To Hear Reliance, BG Exploration Pleas Against Sales Tax Demand 

The Supreme Court on Friday issued notices to the Gujarat government following Reliance Industries Ltd. and BG Exploration’s pleas against the Rs 4,000 crore odd sales tax case imposed by the state.

These are cross appeals filed by the two companies on an earlier case filed by the Gujarat government in 2015, seeking to levy sales tax for the period between 1998 and 2015 for transporting gas from Panna Mukta Tapti gas fields to Hazira Port.

Gujarat claimed sales tax dues from three companies – RIL, BG Exploration and ONGC – towards capital investment and exploration.

The Gujarat government had challenged the Gujarat High Court’s 2015 order that held that the state government lacked the authority to levy sales tax under Gujarat Sales Tax Act, 1969 as gas sales transactions did not take place within the state.

The high court further directed the state government to refund the amount taken from these companies as sales tax with 9 percent interest. The companies are contesting the state government’s demand on grounds that the state has no jurisdiction to levy such a tax as the delivery point of gas lies outside Gujarat.

The Supreme Court has given the Gujarat government, Reliance Industries. and BG Exploration 8 days to file counter affidavits and will hear the case thereafter.