Gail (India) Ltd. Vs Additional Commissioner (Madras High Court)
Madras High Court held that section 76 of the Central Goods And Services Tax Act, 2017 are not applicable since GST component is already remitted by GAIL [transmission vertical]. Accordingly, provisions of section 76 of CGST cannot be invoked. Hence, present petition is allowed.
Facts- The petitioner, Gas Authority of India Limited (GAIL), is engaged in two lines of business, namely, the sale of natural gas to its customers; and the provision of transmission services for natural gas.
Since GAIL is engaged in these two distinct activities across the country, it obtained separate GST registrations for the sake of uniformity. The respondent authorities entertained certain doubts regarding the some alleged transactions and called upon GAIL to furnish documents and clarifications. GAIL duly submitted the required documents.
However, without properly appreciating the same, the impugned show cause notice dated 17.08.2020 was issued, alleging that GAIL had contravened Section 76(1) of the CGST Act and calling upon GAIL to show cause as to why interest, penalty, and an amount of Rs.14,63,42,506/- allegedly collected from customers should not be recovered. Aggrieved by the same, the present Writ Petition is filed.
Conclusion- There can be no two opinions that GAIL (Transmission Vertical) and GAIL (Trading Vertical), having obtained two registrations, are two distinct persons for the purposes of the Act. Even then, at best, it can be said that GAIL (Trading Vertical), instead of paying and remitting the tax under that registration, had paid the same through GAIL (Transmission Vertical).
