A new combined approach of using layered double hydroxides (LDHs) for both environmental remediation and the derived material as heterogeneous catalyst for selective oxidation is presented. A series of CoAl LDHs with carbonate or nitrate anion in the interlayers was synthesized by two different methods, namely, constant-pH precipitation using NaOH as precipitating agent and homogeneous precipitation by hexamine hydrolysis. The samples were optimized for chromate removal and an uptake of 45 mg Cr/g was obtained for CoAl2-N (CoAl-LDH with Co/Al atomic ratio of 2 and nitrate as interlayer anion by constant-pH precipitation) which was significantly higher than its corresponding carbonate sample that showed 15 mg Cr/g. The thus derived materials after uptake of chromate were explored for solvent free selective oxidation of benzyl alcohol using tert-butyl hydroperoxide as oxidant at room temperature. Among the catalysts screened, CoAl2-N sample after chromate uptake gave 23% conversion with 100% selectivity for benzaldehyde using a catalyst/substrate weight ratio 1:20. The catalyst was recyclable up to four cycles, and the reaction was heterogeneous. The studies revealed that the chromate ion-exchanged sample was more stable and selective as oxidation catalyst than that of surface adsorbed sample. The observed activity of this catalyst was ascribed to the cooperative contribution of Co and Cr.