New Delhi : Oil India Limited (OIL) has informed the stock exchanges about significant developments in two high-profile tax litigations currently before the Supreme Court of India. The update relates to the long-pending GST on royalty dispute and the Assam Taxation (on Specified Lands) Act case, both of which have substantial financial implications for the state-owned energy company.
The disclosure was made in compliance with the SEBI (Listing Obligations and Disclosure Requirements – LODR) Regulations, ensuring transparency for shareholders and investors regarding material legal proceedings.
Supreme Court Hearing on GST on Royalty
In its regulatory filing, Oil India Limited stated that the cases challenging the levy of Goods and Services Tax (GST) on royalty paid for natural resources were transferred from the Gauhati High Court and the Rajasthan High Court to the Supreme Court in February 2024.
During the hearing held on July 29, 2026, counsel representing Oil India informed the Supreme Court that the company would deposit the applicable GST amount within six weeks, in accordance with the prevailing legal requirements.
However, the company clarified that the payment would be made without prejudice to its legal rights and would remain subject to the final outcome of the case. The matter has been tagged with a related appeal currently pending before the Supreme Court, and the final judicial verdict will determine the ultimate tax liability.
By agreeing to deposit the GST while continuing to contest the levy, Oil India is complying with judicial directions without conceding its legal position.
Major Relief in Assam Specified Lands Tax Case
In another significant development, Oil India received a major boost in its long-running dispute concerning the Assam Taxation (on Specified Lands) Act.
During proceedings before the Supreme Court, the Government of Assam informed the Court that it intends to withdraw the tax imposed on mineral oil under the amended legislation.
The disputed tax demand amounted to approximately ₹2,484.81 crore, covering the period from 2005 to 2024.
Oil India had challenged the levy on the grounds that the State Government lacked the constitutional authority to impose such a tax on mineral oil.
Following the Assam Government’s submission, the Supreme Court disposed of both the transferred case and the connected writ appeal pending before the Gauhati High Court, bringing the litigation closer to resolution.
Although the proposed withdrawal of the tax still requires completion of the legislative process, the development significantly reduces the legal uncertainty surrounding the matter.
Financial and Strategic Significance
The update is particularly important because the Assam land tax dispute involved a potential financial liability of nearly ₹2,500 crore, making it one of the company’s most significant legal matters.
If the State Government formally withdraws the levy through legislative action, it would eliminate a major contingent liability and strengthen Oil India’s financial outlook.
Meanwhile, the GST on royalty issue continues to remain under judicial examination and is expected to have broader implications for the oil, gas, and mining industries, where royalty payments form a critical component of resource extraction agreements.
Compliance While Protecting Legal Rights
Oil India emphasized that its decision to deposit GST within the timeline prescribed by the Supreme Court should not be interpreted as acceptance of the tax liability.
Instead, the payment is being made solely to comply with the Court’s directions while preserving the company’s legal rights until the Supreme Court delivers its final judgment.
This approach enables the company to remain compliant with judicial requirements without compromising its position in the ongoing litigation.
Investor Outlook
The latest developments provide a mixed but largely positive outlook for investors.
While the GST on royalty case remains pending and its final financial impact will depend on the Supreme Court’s verdict, the Assam Specified Lands Tax dispute has moved towards a favorable resolution following the State Government’s decision to withdraw the levy.
The removal of a potential ₹2,484.81 crore tax liability, subject to legislative approval, could significantly reduce legal and financial uncertainty for Oil India Limited, reinforcing investor confidence and supporting the company’s long-term financial stability.
