Steel Mill Gained Rs 140-Cr Entry Tax Due To Odisha, Says PIL

Cuttack: A public interest litigation (PIL) has been filed at the Orissa High Court, seeking show cause notice to Odisha government on alleged loss of around Rs 140 crore of entry tax due from Bhusan Power and Steel.

The PIL filed by Odisha Civil Liberty Forum (OCLF), an organisation working for promoting awareness on civil liberty, has alleged that due to the lapses on the part of concerned departments, the state government lost Rs 140 crore which could have proved valuable to the cash-strapped government battling the ongoing COVID-19 pandemic.

“It is quite apparent there have been serious lapses in the duty of the concerned departments and the law officers who are supposed to protect the interests of the state,” the PIL stated.

After the state legislature enacted the law on entry tax, it was challenged in the Supreme Court in 2016. A nine-judge Constitution bench, presided by Chief Justice T S Thakur, ruled in favour of the validity of separate entry taxes on goods as mandated by the state government.

In 2017, Punjab National Bank filed an insolvency application against Bhusan Power and Steel at the National Company Law Tribunal (NCLT).

In 2019, the Odisha government went on company appeal at NCLAT. But the tribunal dismissed it on the ground that “no claim was filed by the state of Odisha before the Resolution Professional”. Besides the state filed the appeal after 30 days against the notice period of 15 days, the tribunal added.

The OCLF, in its PIL, pointed out that when the matter was being adjudicated before the NCLT, Odisha did not put up any claim about the entry tax amounting to Rs 139,15,80,504.

The NCLAT notified the list of operational creditors, but the state remained silent which creates suspicion about its intent, conduct and commitment to the interests of the state, the PIL said.

Stating that the amount is a legal entitlement of the state and the people have a right to this, the OCLF prayed to the court that a thorough enquiry needs to be conducted into the working of Finance, Commercial Tax, and Law departments of the state government and the Advocate General of India.

The PIL cited similar instances of lapses allegedly done earlier with an intention to favour certain other metallurgical companies to drive home its point.

Earlier, the state Congress had raised this issue at a press conference and demanded strong action against those responsible.