State-owned Indian Oil Corp (IOC) may drag the Odisha Government to court for reneging on its promise to give tax concessions to its `34,555 crore Paradip refinery in the state. less than two months after serving the first show-cause notice, the Odisha Government on February 22 wrote to its single-biggest investor saying it is withdrawing the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state.
“We are trying to explain to them that we came to Odisha only based on their commitment to give certain tax incentives. Now, they cannot go back on them. If we don't succeed the only option left for such will be to take it up legally,” a top company official said. The Odisha Government is basing the withdrawal on two grounds - that the project was delayed by six years and the size of the refinery has been changed to 15 million tonnes a year from the previously agreed 9 million tonnes.
“They do not have a case on both the counts. For one, we had way back in 2006 informed them in writing about the decision of doing a larger size refinery together with petrochemical plant,” he said. As regards delay, the official said the state government should have conveyed its decision of not giving the tax incentives way back in 2009 when the investment decision was taken and conveyed to them.