Aswathy Gas Agencies Vs Indian Oil Corporation Ltd. (Kerala High Court)
Kerala High Court held that unless and until there is any such supply of goods/services, the question of demanding GST does not arise at all. Thus, respondent Corporation would not be entitled to collect tax under the provisions of the CGST Act 2017/SGST, Act 2017 from the petitioners.
Facts- These writ petitions are filed by distributors of LPG appointed by the 1st respondent herein challenging orders imposing penalty, appellate orders, as also the Marketing Discipline Guidelines, 2018 under which the penalty is imposed. The only other subsisting challenge arising for consideration in these writ petitions is as regards the demand of GST (Goods and Services Tax) by the impugned orders.
Conclusion- There is no case for the respondent Corporation that the petitioners and the respondent Corporation have entered into such an agreement/contract for a “consideration”. Such an agreement cannot be presumed to exist between the parties also. Here, the amounts sought to be collected from the petitioners towards penalty are not towards tolerating an act/situation. Instead, the amounts sought to be recovered are for not following the terms of the agreement/MDG framed by the respondent corporation. In fact, the amounts are sought to be recovered as a deterrent against future breach of contract between the petitioners and the respondent Corporation. The amounts sought to be recovered are under no stretch of imagination being collected towards tolerating the violation of the terms of the MDG. Thus, the respondents are not entitled to collect GST from the petitioners herein.
