The Supreme Court has asked the Ruias owned Essar Oil to pay dues of Rs 1,000 crore as sales tax to the Gujarat government by July 30, following which the coercive action taken by Gujarat government to force immediate payment of the remaining principal amount of over $1 billion would be stayed. This led the shares of Essar Oil to fall over 3% to Rs 53.5 in a flat Mumbai market on Tuesday. 

Shares of Essar Oil, a unit of the London listed Essar Energy Plc. recovered to close down 1.5% to Rs 54.5 on Tuesday after Essar Oil in a statement issued after the apex court order said that Essar Oil has already offered to pay this amount in its submission to the court. 

"Essar Oil is also in advanced discussions with Indian lenders with regard to putting in place a US$1 billion (Rs 50 billion) 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," said an Essar Oil statement on Tuesday. 

Last week, the Gujarat government sealed three bank accounts of the company in a bid to recover Rs 8,000 crore dues, including interest towards deferred tax liability after the Gujarat high court directed the state government to expedite the recovery process from the company. 

The matter will be heard on July 31. Earlier this year, the apex court ruled that the Mumbai-based refiner would no longer be eligible for a program that had allowed it to defer paying about Rs 6300 crore in sales taxes to the Gujarat government until 2021. (Times of India)