The Kerala High Court has held that Indian Oil Corporation Limited (IOCL) is not entitled to collect GST from LPG distributors on penalty imposed for non-attendance of leakage complaint.
The bench of Justice Harisankar V. Menon has observed that 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. Therefore, the IOCL is not entitled to collect GST from the petitioners/LPG distributors.
The petitioners are the distributors of LPG appointed by the IOCL challenging orders imposing penalty, appellate orders, as also the Marketing Discipline Guidelines, 2018 under which the penalty is imposed.
The penalties were imposed with respect to a complaint raised by a consumer/customer alleging non-attendance of a leakage complaint. The petitioner has raised a contention to the effect that there was no deliberate non-attendance of the complaint as alleged, that the complaint was received at its end only on 21.8.2020 by 4:33 pm, that the complaint was attended by the mechanic through a telephone call by 5:30 pm/5:45 pm etc.
The petitioners have challenged the GST demand of Rs.28242.45 and it is sought to be recovered from the petitioner. The IOCL has sought to demand Rs.22,140 towards GST.
The petitioner contended that the demand of GST as above was without any justification and arbitrary. He points out that there is no “supply of service” so as to demand GST from the petitioners.
The court while allowing the petition held that 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.
Case Details
Case Title: M/S.Aswathy Gas Agencies Versus Indian Oil Corporation Ltd.
Case No.: WP(C) NO.2552 OF 2021
Date: 12/12/2024
Counsel For Petitioner: Adv. R.Surendran
Counsel For Respondent: M. Gopikrishnan Nambiar
