ONGC LTD. Vs. STATE OF GUJARAT

JUDGEMENT

(1.) These appeals are filed by the Oil and Natural Gas Corporation ("ONGC", for short) calling in question the judgments of the Gujarat Value Added Tax Tribunal ("the Tribunal") involving identical issue. Tax Appeal No. 50 of 2014 is treated as a lead matter and the facts are therefore, recorded from such proceedings. The appellant, ONGC, is engaged in exploration, development and production of the petroleum products. The memorandum of association of ONGC outlines the main object to be pursued by the Corporation. The other object clauses contained in the said memorandum include the following clauses:

(2.) Issue in all the appeals is identical. The appeals were admitted for consideration of the following substantial question of law:

(3.) The learned advocate Shri N. Venkataraman for ONGC took us through the Government of India policy of controlling consumer prices of different petroleum products and the manner and method of achieving such objective. He submitted that under the directives of Government of India, ONGC is authorised to sell its specified petroleum products only at the controlled price. The whole mechanism is worked out in order to ensure that the individual consumers do not have to bear the full burden of the international price fluctuations. These products include kerosene distributed through public distribution system often referred to as "PDS" kerosene, petrol, diesel, and LPG for domestic use. He pointed out that the Government of India also decides in what manner and by which entity the losses resulting out of such mechanism would be borne. In essence, ONGC sells its such products to the distribution companies at the rate mandated by the Government of India and accounts for such price for the computation of its turnover. In the background of such facts, counsel raised the following contentions: