PIL puts Tata Motors, state govt in the dock over Nano deal

The Gujarat High Court on Friday issued notices to the state government and Tata Motors on a public interest litigation alleging that the Gujarat government was extending undue financial benefits to the company that manufactures Nano at its plant in the state and that the same should be stopped.

According to the PIL, the state government has been extending a loan to Tata Motors of an amount that equals the value added tax (VAT) that the company pays in the state. The loan comes at a nominal 0.1 per cent interest rate and a 20-year deadline for repayment. The petition further claims that the company is taking advantage of this deal by showing the sale of all its Nano cars in the country to one of its companies in Gujarat to claim a higher amount in loan.

A division bench of HC comprising Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala issued the notices and posted the matter for further hearing after summer vacation.

According to petitioner Himanshu Patel, a lawyer from Gandhinagar, it's a "deliberate action against the interest of public" on the part of the state government in contravention of its policy decisions.

So far, the state government has paid around Rs 300 crore to Tata Motors as loan against the VAT paid by the company on sale of Nano cars in Gujarat, the petition says.

To maximise its financial benefits, the company is selling all its Nano cars to its wholly-owned subsidiary in Gujarat, which in turns sells them across the country, the PIL alleges.

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