hc58 State Of Gujarat vs Gas Authority Of India Ltd. on 31 July, 2018

Gujarat High Court

State Of Gujarat vs Gas Authority Of India Ltd. on 31 July, 2018

• ench: M.R. Shah, B.N. Karia
• /SCA/12980/2007

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 12980 of 2007

With

R/SPECIAL CIVIL APPLICATION NO. 15822 of 2007

To

R/SPECIAL CIVIL APPLICATION NO. 15840 of 2007

CAV JUDGMENT

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH Sd/−

and

HONOURABLE MR.JUSTICE B.N. KARIA Sd/− =============================================

1. Whether Reporters of Local Papers may be allowed to see No the judgment ?

1. To be referred to the Reporter or not ? No

• Whether their Lordships wish to see the fair copy of the No judgment ?

• Whether this case involves a substantial question of law as No

to the interpretation of the Constitution of India or any order made thereunder ?

============================================= STATE OF GUJARAT Versus GAS AUTHORITY OF INDIA LTD.

============================================= Appearance:

MR MANISH R BHATT, SENIOR ADVOCATE with MRS MAUNA M BHATT, ADVOCATE for the P e t i t i o n e r ( s ) N o . 1 MR MIHIR THAKORE, SENIOR ADVOCATE with MR RAKESH GUPTA, ADVOCATE with MR KUNAN NAIK, ADVOCATE with MR VIVAN SHAH, ADVOCATE for M/S TRIVEDI & GUPTA, A D V O C A T E f o r t h e R e s p o n d e n t ( s ) N o . 1 M R HARIN P RAVAL , A DVOCATE for the Respondent ( s ) No . 7 MR V H K ANAR A , A D VOCATE f or t h e R e s po n d e n t ( s ) No . 7 R U L E S E R V E D f o r t h e R e s p o n d e n t ( s ) N o . 2 − 4 , 6 R U L E S E R V E D B Y D S f o r t h e R e s p o n d e n t ( s ) N o . 5 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA

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D a t e : 3 1 / 0 7 / 2 0 1 8 C O M M O N C A V J U D G M E N T (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] As common question of law and

f a c t s a r i s e i n t h i s g r o u p o f petitions and as such arise out of the impugned common judgment and order passed by the l e a r n ed Gu j arat S a l e s T a x T r i b u n a l , A h m e d a b a d ( h e r e i n a f t e r r e f e r r e d t o a s ” T r i b u n a l ” ) p a s s e d i n A p p e a l N o s . 4 / 2 0 0 5 t o 2 3 / 2 0 0 5 a s w e l l a s t h e c o m m o n o r d e r p a s s e d b y t h e l e a r n e d T r i b u n a l i n res p e c t i v e R e c t i f i c a t i o n A p p l i c a t i o n s , a l l t h e s e p e t i t i o n s a r e d e c i d e d a n d disposed of by this common judgment and order.

[ 2 . 0 ] F o r c o n v e n i e n c e , S p e c i a l C i v i l A p p l i c a t i o n N o . 1 2 9 8 0 / 2 0 0 7 a r i s i n g out of the impugned judgment and order dated 16.05.2005 passed by the learned Tribunal in A p p e a l N o . 1 7 / 2 0 0 5 a n d t h e o r d e r d a t e d 06.07.2006 rendered in Rectification Application No.34/2005 be treated as the lead matter.

[3.0] The facts leading to the present Special Civil Applications in nut−shell are as under:

[ 3 . 1 ] T h at t h e O il a n d N a t u r a l G as C o r p o rat i o n ( h e r e i n a f t e r r e f e r r e d t o as “ONGC”) is the purchaser of natural gas in India. According to the petitioner – State of Gujarat, earlier ONGC used to market the gas directly to its consumers. However, later on, for administrative convenience, manufacturing activity was separated from marketing activity and given to the respondent No.1 herein – original appellant – Gas Authority of

India Ltd. (hereinafter referred to as “GAIL”). The entire quantity of gas produced w a s t h e r e a f t e r m a r k e t e d b y G A I L exclusively under back to back arrangement . The nat u r a l g a s c om i n g ou t o f t h e n a tur a l g a s f i el d w a s r e q u i r ed t o b e u sed i n its e n tirety si n c e i t cannot be stored as in the case of electricity.

[ 3 . 2 ] T h e C e n t r a l Governme n t c o n s t i t uted a Gas Linkage Committee of w h ich ONGC a nd GAIL w ere m e mbers . The said Commi t t ee de c id e d i n advance the quantity of gas to be allocated to the respective industries keeping in view the total

g a s p r o d u c t i o n , c o m p a r a t i v e n e e d a n d t h e priority o f the industr i es concerned . B a sed o n such allocat i o n , b o t h o n f i rm a nd o n f a l l back ba s i s , G A IL entered i nto binding c o n tr a cts w ith th e allotte e s / c o nsumers of gas , stipulating , inter alia , the price and d a i l y co n s u m p tion of gas . The minimum actual quantity of gas was required to be lif t e d by the consumer failing which a particular amount was required t o be p a id to GAIL by the said consumers . Based on the declaration of the daily requirem e n t of the consumers , each day supply was determined by G A IL which included supply t o certain consumers on fall back basis . A ccording to the petitioner State , the same was to ensur e t h a t t h e e n t i r e q u a n t i t y o f g a s p r o d u c e d b y O N G C i s p u r c h a s e d b y G A I L a n d s u p p l i e d t o i t s p r e − determined customers and that no gas is allowed to be wasted. According to the petitioner State, in the contract executed with the individual industrial consumers, GAIL insisted

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on the industries maintaining a firm time schedule for each item of work of commissioning of plant in which gas would be consumed and stipulated for stringent penalty, if the industries failed in taking delivery of the specific quantity of gas on each day.

[3.3] GAIL had installed a pipeline network from Hazira (Gujarat) to Jagdishpur (U.P.) covering the State of Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, Delhi and Haryana with Hazira−Bijapur−Jagdishpur (hereinafter referred to as HBJ Pipeline). Through the said HBJ

Pipeline network, GAIL supplied gas to various industries in the power, fertilizer and o t her sectors which w e re l ocated al o ngwi t h the pipeline network. The delivery of the natural gas was being taken from ONGC at Hazira. After t aking deli v ery fro m ONGC , some quantity of natural g a s was sold t o the consumers within the State of Gujarat and the re s t to t h e c o n s u m e r s / c u s t o m e r s i n t h e S t a t e s o f M a d h y a P r a d e s h , U t t a r P r a d e s h , R a j a s t h a n , D e l h i a n d H a r y a n a . A c c o r d i n g t o t h e p e t i t i o n e r State, GAIL at Hazira charged local sales tax and deposited the same with the petitioner State i . e . L o c a l S a l e s T a x A u t h o r i t y f o r t h e t r a n s a c t i o n o f s a l e , t o t h e l o c a l c u s t o m e r s i n G u j a r a t S t a t e . G A I L s h o w e d dispatches to the customers in other States as stock transfer. GAIL also transferred certain portion of gas to its LPG plant located in Madhya Pradesh and Uttar Pradesh for captive c o n s u m p t i o n a n d t r e a t i n g t h e s a m e a s ” s t o c k t r a n s f e r ” . I n t h e s a i d p r o c e s s , G A I L p a i d 4 % l o c a l s a l e s t a x o n t h e

p u r c h a s e o f g a s w h i c h w a s t r e a t e d b y i t a s s t o c k t r a n s f e r . A c c o r d i n g to th e p e t i t i o n e r S t a t e , u n d e r S e c t i o n 1 2 o f t h e G S T A c t , a d e a l e r c a n p u r c h a s e g o o d s f or stock transfer in Form No . 17 by payi n g 4 % t ax o n pu r c h a s e pr i c e . H o w e v e r , G A I L t r e a t e d a l l t h e t r a n s a c t i o n s an d s u p p l i e d m a d e t o t h e c o n s u mers / cu s to m ers l o c at e d out of Gu j a r a t S t a t e as ” s t o c k t r a n s f e r ” u n d e r S e c t i o n 6 A o f t h e C e n t r a l A c t ( h e r e i n a f t e r referred to as “CST Act”) and did not pay any sales tax under the said Act.

[3.4] It appears that investigation was carried out by the Flaying Squad at the premises of the Compressor Station of GAIL at Hazira on 08.08.1999. During the investigation, copies of documents, correspondences and evidences relating to the transactions for the year 1994 − 9 5 t o 1 9 9 9 −2 0 0 0 w e r e o b t a i n e d . T h a t a f t e r s c r u t i n i z i n g t h e s a i d do c u m e n t s , t h e A s s e s s i n g O f f i c e r f o r m e d a n o p i n i o n t h a t t h e s o c a l l e d / a l l e g e d ” s t o c k t r a n s f e r ” t r a n s act i o n o f G A I L w e r e a c t u a l l y in t h e n a t u r e o f i n t e r − State sale which were taxable in Gujarat State under Section 3 of the CST Act. A detailed show − cause notice dated 01.09.1999 as issued by the Assessing Officer under the GST Act read with the relevant provisions of the CST Act to GAIL by which the GAIL was called upon to show− cause as to why the alleged stock transfer transactions should not be treated as inter − S t a t e s a l e a n d w h y t a x a n d n e c e s s a r y p e n a l t y s h o u l d n o t b e l e v i e d . T h a t G A I L r e p l i e d t o t h e s a i d s h o w −c a u s e n o t i c e . T h a t a f t e r considering the s u bmis s ion made by GAIL , a provisional assessment o r d e r w a s p a s s e d h o l d i n g t h a t t h e s o −c a l l e d s t o c k t r a n s f e r t r a n s a c t i o n s o f G A I L ( o t h e r t ha n t h e s u p p l y t o L PG p l a n t ) were in re a l i ty i n th e natur e o f i n t e r −

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State sale which were taxable in Gujarat State under Section 3 of the CST Act. Accordingly, a p r o v i s i o n a l a s s e s s m e n t o r d e r w a s p a s s e d u n d e r S e c t io n 4 1B o f t he G S T A ct as wel l as u n de r th e CST Act a s s e ss i n g GAIL provisionally for the period 1994 −95 to 1999 −2000 under the GST Act and CST Act. The Assessing Officer also imposed interest for the years 1994−95 to 1999−2000.

[ 3 . 5 ] I t ap p e a r s t h a t i n s t e a d o f c h a l l e n g i n g t h e p r o v i s i o n a l a s s e s s m e n t o r d e r s , G AIL s t r a i g h t w a y f i l e d w r i t p e t i t i o n s b e f o r e t h e H o n ‘ b l e S u p r e m e C o u r t . T h e H o n ‘ b l e S u p r e m e C o u r t g r a n t e d s t a y a g a i ns t t h e r e c o v e r y o f the dues. That thereafter the regular assessment orders under Section 41 of the State Act were p a s s e d f o r t h e p e r i o d 1 9 9 8 −9 9 a n d 1 9 9 9 −2 0 0 0 u n d e r b o t h t h e S t a t e as well as Central Acts. GAIL filed another writ petition before the Hon’ble Surpeme Court c h a l l e n g i n g t h e a f o r e s a i d a s s e ssme n t o r d e r s . Th e Ho n ‘ ble Sup r e m e C o u r t g r a nte d s t a y a g ai n s t t h e r e c o v e r y p r o c e e d i n g s ar i s i n g fr o m t h e sa i d a s s e s s m e n t o r d e r s . T h a t b y or d e r d a t ed 01 . 0 2 . 2 00 5 , the H o n ‘ b l e Suprem e Court dispo s e d of a l l t he writ petitions and the Hon’ble Supreme Court remanded the matters to the learned Tribunal for a decision on the issue whether the sales in question were inter−State or inter−State Sales and whether GAIL was liable to pay any tax under the State and the Central Act or not. It appears that thereafter the ONGC preferred appeals before the learned Tribunal cha l l e n gi n g the p rov i si o nal ass e s s m e n t ord e r s / a s s e s s m e n t o r d e r s . T h a t d u r i n g the penden c y of t h e a p p e a l s , on behal f of G A I L , an application at Exh.18 was filed requesting the learned Tribunal to make spot visit at the place of bu s i n e s s o f G A I L . T h a t b e f o r e t h e l e a r n e d T r i b u n a l , G A I L – o r i g i n a l a p p l i c a n t a l s o j o i n e d t h e r e s p o n d e n t N o s . 2 t o 7 herein viz. State of Madhya Pradesh and other States. It appears that the State of Rajasthan filed

i t s r e p l y a t E x h . 1 9 w h e r e b y t h e S t a t e o f R ajasth a n a c cepted th e view canvas s e d b y G A I L . T h e p e t it i o n e r S t a t e o f Guja r a t f i l e d i t s w r i t ten s u bm i ssion at E x h . 20 . I t was t h e case on behalf of the petitioner State that there was sale of certain goods and there was movement of goods from the State, outside the State pursuant to a contract and in the course of inter − S t a t e s a l e . G A I L f i l e d i t s w r i t t e n s u b m i s s i o n a t E x h . 2 1 . G A I L r e i t e r a t e d i t s a s s e r t i o n s t h a t t h e t r a n s a c t i o n i n q u e s t i o n w e r e s t o c k t r a n s f e r a n d d i d n o t c o m e w i t h i n t h e a m b i t o f i n t e r − S t a t e s a l e . T h a t p u r s u a n t t o t h e a p p l i c a t i o n m a d e b y G A I L , a s i t e inspection was carried out by the President of the learned Tribunal on 09.04.2005 at Hazira site

and plant of GAIL. The President of the learned Tribunal also carried out site inspection at Vijaypur on 17.04.2005.

[ 3 . 6 ] I t a p p e a r s t h a t d u r i n g t h e p e n d e n c y o f t h e p r o c e e d i n g s b e f o r e t h e l e a r n e d T r i b u n a l , G o v e r n m e n t o f I n d i a , M i n i s t r y o f F i n a n c e i s s u e d t w o n o t i f i c a t i o n s b o t h d a t e d 1 7 . 0 3 . 2 0 0 5 . T h e g i s t o f t h e n o t i f i c a t i o n w a s t h a t t he C e n t r a l G o v e r n m e n t d e c l a r e d t h a t t h e a u t h o r i t y f o r a d v a n c e r u l i n g c o n s t it u t e d u n d e r S e c t i o n 2 4 5 O o f t h e I n c o m e T a x A c t , 1 9 6 1 s h a l l a l s o

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be the Central Sales Tax Appellate Authority to settle inter −State disputes falling under Section 6 A r e a d w i t h S e c t i o n 9 o f t h e C S T A c t . T a k i n g recourse to section 25 of the CST Act, the petitioner State of Gujarat filed an application before the learned Tribunal that in view of the changed legal scenario, the learned Tribunal had no jurisdiction to decide the matter, as the powers were now required to be exercised by t h e C e n t r a l S a l e s T a x A p p e l l a t e A u t h o r i t y . T h a t b y i m p u g n e d c o m m o n judgment and order dated 16.05.1985, the learned Tribunal allowed the appeals preferred by GAIL and set aside the provisional assessment orders under Section 41B of the Act and also set aside the order imposing interest in the provisional assessment. The learned Tribunal was further pleased to remand the matter to the Assessing Officer with a direction to assessee GAIL for transaction “of branch transfer as contended by GAIL” and to decide the tax liability accordingly. That thereafter the State preferred r e c t i f i c a t i o n a p p l i c a t i o n s b e f o r e t h e l e a rn e d T r i b u n a l u n d e r S e c t i o n 7 2 o f t h e G S T A c t r e a d w i t h S e c t i o n 9 ( 2 ) of the CST Act, seeking rectification of the judgment and order dated 16.05.2005, as according t o t h e p e t i t i o n e r S t a t e , t h e r e w e r e e r r o r s a p p are n t o n t h e f a c e o f t h e r e c o r d . T h a t b y o r d e r d a t e d 0 6 . 0 7 . 2 0 0 6 , t h e learned Tribunal rejected the rectification applications.

[ 3 . 7 ] F e e l i n g a g g r i e v e d a n d d i s s a t i s f i e d w i t h t h e i m p u g n e d j u d g m e n t and order dated 16.05.2005 passed in Appeal No.17/2005 and the order dated 06.07.2006 passed in Rectification Application No.34/2005, the State of Gujarat through the Commissioner of Commercial Tax has preferred the Special Civil Application No.12980/2007.

[4.0] Shri Manish R. Bhatt, learned Senior Advocate has appeared on behalf of the petitioner – S t a t e o f G u j a r a t a n d S h r i M i h i r T h a k o r e , learned Senior Advocate has appeared on behalf of the respondent No.1

– GAIL.

[ 5 . 0 ] S h r i M a n i s h B h a t t , l e a r n e d C o u n s e l a p p e a r i n g o n b e h a l f o f t h e p e ti t io n e r – S t a t e o f G u j a r a t h a s v e h e m e n t l y s u b m i t t e d t h a t i n t h e f a c t s a n d c i rc u m s t a n c e s o f th e c a s e t h e l e a r n e d T r i b u n a l h a s m a t e r i a l l y e r r e d in quashing and setting aside the provisional assessment orders and in holding that the transaction was only “stock transfer” and cannot be termed as “inter−State sale”.

[5.1] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the petitioner t h a t a s s u c h t h e l e a r n e d T r i b u n a l h a s

materially erred in assuming the jurisdiction more particularly in view of the fact that despite the subsequent constitution of Committee / Authority to deal with the dispute inter − S t a t e a n d / o r s e t t l e t h e i n t e r − State disputes falling under Section 6A read with Section 9 of the CST Act. It is submitted that i n v i e w o f t h e c h a n g e d l e g a l s c e n a r i o , t h e learned Tribunal had no jurisdiction to decide the matter, as the powers were required to be

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exercised by the Central Sales Tax Appellate Authority. It is submitted that the learned T r i b u n a l a s s u c h h a d n o t

a g r e e d wi t h t h e s u b mi s s i o n o n b e h a l f o f t h e p e t i t i o n e r S t a t e w i t h r e s p e c t t o t he j u r i s d i c t ion of t h e learne d T r i b una l t o deal wi t h a n d / o r s e t t l e t h e i n t e r − S t a t e d i s pute s m a in l y o n th e gr o u n d t h a t th e l ea r n e d T ribun a l i s exercising the jurisdiction pursuant to the order passed by the Hon’ble Supreme Court. It is s ub m i t t e d t h a t h o w e v e r a t t he t i m e w h e n t h e H o n ‘ b l e S u p r e m e C o u r t r e m a n d e d t h e m a t t e r to the lea r n e d T r i bunal , there was no such provision which came into existence subsequent to the order passed by the Hon’ble Supreme Court. It is submitted that therefore the learned Tribunal has materially erred in exercising the jurisdiction not vested in it.

[ 5 . 2 ] It i s fu r ther su b mit t ed by S hri Bhat t , lea r n ed C o unse l app e a r ing on b e h a l f o f th e p e t i ti o n e r t h a t t he a t t e ntion o f t h e l e a r n e d T r i bu n al was sp e ci f i c a l l y dr a w n by fil i ng a p p l i c a t i on Exh . 36 to the effect tha t i n view o f th e d e c i s i o n o f t he H o n ‘ b l e S up r e m e C o u r t i n t h e t w o c a s e s o f A s h o k L e y l an d , t h e C e n t r a l G o v e r n m e n t h a d a me n d e d t h e C S T A c t b y ad d i n g 8 n e w secti o n s t o t he C ST Act a n d t h i s w a s d o n e b y t h e C e n t r a l S a l e s Ta x ( A me n dme n t ) A c t , 2 0 0 1 . I t i s s u b mitte d tha t i t w a s b r o u ght to t he not i c e of the learned Tribunal that in view of the express provision of Section 24 read with Notification

d a t ed 17 . 0 3 . 2 0 0 5 , s a p e r t h e p r o v i s i o n s o f section 25, as the authority for advance ruling as constituted, the appeal pending before the l e a r n e d T r ib u n a l s t o o d t r a ns f e rre d t o such a n authority . I t i s s u b mit t e d t h a t d e s p it e the ab o ve and d e spite the f a ct that t h e i s s ue r e l atin g t o j u r isd i c t i o n g o to t h e r o o t o f t h e m a t t er , t h e learn e d Tribunal did not transfer the proceedings to the Appellate Authority so constituted.

[ 5 . 3 ] It is further submitted by Shri Bhatt , learned C ounsel a pp e ari n g o n b ehalf of the p e t i t io n er tha t e v e n o t h e r w i s e t h e i m p u g n e d j u d g m e n t is c l earl y in br e ach of principles of natural justice . It is submitted that various oral assertions on technical aspect were made on behalf of GAIL during the course of o ral argume n ts . It is submitted that petitioner ‘ s Counsel was not allowed to counter those arguments and was directed t o file written versions and accordingly the petitioner – State through its Couns e l fi l ed its written versions at Exh . 38 replying to the oral assertions made on behalf of GAIL . It is submitted that the impugned order passed by the le a rned Tr i bunal is silent on the written submissions made and has not even referred to the same.

It is further submitted that the petitioner also filed submissions and produced technical evidence at Exhs.20 and 32 and it also filed opinion of the technical expert at Exh.34. It is submitted that the petitioner State also filed the copy of the layout diagram from the website of GAIL. It is submitted that all the aforesaid materials are not dealt with by the learned Tribunal in the judgment. It is submitted that therefore the impugned

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j u d g m e n t i s n o t o n l y i n c l e a r b r e a c h o f principles of natural justice but is also a judgment rendered without due application of mind.

[5.4] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the pet i t i on e r State that even the learned T ribunal also acted beyond the directions issued by th e H o n ‘ ble S u p r e m e C o u r t . I t i s submitted that the Hon’ble Supreme Court while remanding the matter to the learned Tribunal under its judgment dated dated 01.02.2005, directed the learned Tribunal to factually c o n c l u d e t h e n a t u r e o f t h e trans a ctions b y microscopic examination of evidence produced by both the parties . It is submitted that t he direct i ons of the Hon ‘ ble Supreme Court had not been followed or examined with reference to the factual evidence available on record. It is submitted that the facts as were available on record were required to be analyzed by the learned Tribunal. However, in the process, it was not open for the le a r n e d Tribun a l to go bey o n d its aut h ority o r power s v est e d under the Act . It is s ubm i tte d that th e learned Tr i bunal in the instant case travelled beyond the authority of law by carrying out spot investigation, by entertaining fresh evidence and by e ntertaining diagrams from GAIL , without the same having been backed by any cogent evidence . It is submitted that in thi s process the learne d T r i b u n a l p l a c e d s ubs t a n t i v e r eli a n c e o n t h e s it e v i s i t o f t he P r e s i d e n t . I t i s s u b m i t t e d t h a t t h e p r ov i s i o n s o f S tate Act and the CST Act and the Regulations framed thereunder does not envisage such a mode of evidence.

I t i s s u b m i t t e d t h a t a s s u c h t h e l e a r n e d Tr i b u n a l wa s b ou n d b y i t s o w n r e g u l a t i o n s v i z . t h e G u ja r a t S a l e s T a x T r i b una l R e g u l a t i o n , 1 9 7 3 . I t i s s u b m i t t e d t h a t a s per R egula t ion 2 3 , s i t e visit report is not an evidence recognized by the said Regulation. It is submitted that therefore the learned Tribunal has materially erred in relying upon the site inspection report.

[5.5] It is further submitted that even the site inspection report dated 17.04.2005 is factually i n correct . I t is su b mitted t hat th e s a i d r e p o r t , without any technical back up notes that in case of shutdown, out of 2 LPG plants, the second will work and will fulfill the requirement of customers. It is submitted that the report

f u r t h e r n o t e s t h a t s i n c e i n s t a l l a t i o n o f the s e pla n t s , no c o mp l e t e sh u t d o wn has t a ke n pla c e . I t is submitted that as such the petitioner had produced on record opinion of an expert, who had clea r l y s tated th t t h e s a id repor t wa s f a ct u a lly in c or r e c t inasmu c h a s d u ri n g t h e sh u t d o w n o f L P G p l a n t , c u s t o me r s a r e supplied rich gas and one LPG plant at Vijaypur cannot handle full load of gas. It is submitted that the learned Tribunal misdirected itself in relying upon an incorrect site visit report.

[ 5 . 6 ] I t i s f u rt h er submitted b y Sh r i B h att , lea r n e d C ounsel a pp e arin g o n b e hal f o f t h e pe t i t i on e r t hat e v e n o n m e r i t s a l s o t h e l e a r n e d T r i b u n a l has materially erred in holding the transaction as “stock transfer” and not as “inter−State sale”. I t i s s u b m i t t e d t h a t w h i l e h o l d i n g t h e

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transactions in question as “stock transfer” and not as “inter −State sale”, the learned Tribunal has not properly appreciated the following facts and the material on record.

“1. That as per MOU between ONGC and GAIL, ONGC had transferred

t h e i r n a t u r a l g a s m a r k e t i n g f u n ct i o n t o G A I L f r o m 01.01.1991 with existing customers;

• T h a t G A I L i s a S p e c ia l P u r p o s e V e h i c l e f o r m a r k e t i n g / supplying the natural gas to customers;

• T h a t as per c l a u s e of d r awa l of g a s i n t h e M O U , O N G C w a s

to s uppl y and GAI L w a s req u ired to d r a w dai l y t h e q ua n t i t y of gas

a s p e r e x i s tin g s u ppl y co n t r a c t / a r r a n g e m e nt b e t w e e n O NG C a n d

its existing customers;

4 . T h a t th e C e n t r a l G o ve r n m e n t h a d s e t up a G L C . T h e ma i n

functi o n o f G LC wa s to f i x pr i o r i ty of s ector s like p o wer , f e r tili z er

etc . t o w h om ga s wa s t o b e a l loc a te d an d q u antum of gas t o be supplied to each sector;

5 . T h a t wh o e v e r w an t e d t o p u r c h a se n a t u r a l g a s h ad t o f i rst

e n te r i n to a c o ntract wit h G A I L f or s u c h s u p p ly . Suc h contra c ts

wer e e xec u ted b y Re g io n al and H ea d Office o f G A I L w i t h v a r i o u s

s u c h c u st o m e r s . I n s u c h c o n t r a c t s , t h e q u a n t i t y o f g a s was d e c i d e d

in a d v a n c e , th e p e r i o d o f s u p p l y w a s f i x e d , t h e cus t o me r h a d t o

depos i t a f ixed amo u n t an d h ad to su b m i t ban k guar a n tee , t h e gas

was to be transported from the down stream flange of pipeline at the outlet of the

g a s m e t e r i n g s t a t i o n l o c a t e d a t t h e f a c t o r y

p re m i s e s o f t h e c u s t o m e r , t h e t i t l e t o g a s w a s t o p a s s f r o m G A I L t o

t h e c u s t o m e r a t t h e point o f d eli v ery o f gas , the p o int of de l i v e r y

w as at the do w n s t re a m f l a n g e o f th e p i p e lin e a t t h e o utlet o f gas

metering station, the maximum quantity to be supplied by GAIL and the

m aximu m q u a n t i t y t o b e l i f t e d b y t h e c u s t o m e r s was

fixed, there was a provision of minimum warranted off take by the customers, the

cus t o m e rs had to provide GAIL with periodical

fo r eca s t of the qua n ti t y re q u i r e d b y it , t h e q u a l i t y o f g a s w a s fi x e d

and w a s t o b e d e t e r m i ned b y m e an s o f on l i n e a u t o m a t i c s a m pler

u nit i n s tal l e d b y G A I L , s h u t d o w n an d sto p p ag e o f s u p p l y wa s to

be actually discussed and planned by the customer and GAIL.

6. After entering into contract of supply with the customers, GAIL installed gas

m e t e r i n g s tat i o n a t t h e p r e m i se s o f t h e

c us t o m e r a n d v ar i o u s s pur pip e l i ne s w e r e s ubs e que n t l y c o n n e c t e d

to main pipeline to meet the requirement of the customer;

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7 . T h a t t h e s u p p l y o f g a s w a s o n c o n t i n u o u s b as i s e x c e p t i n

case of unforeseen emergency like shut down etc.”

[ 5 . 7 ] I t i s s u b m i t t e d t h a t i n v i e w o f t h e a b o v e p r o v i s i o n s o f c o n t r a c t , t h e l e a r n ed T r i b un a l o ug h t to have h e l d t h at t h e t r a nsact i o n in q u e s t i o n w as n o t h i n g b u t i n t h e n a t u r e o f s a l e ( i n t e r −S t a t e s a l e ) a n d n o t s t o c k t r a n s f e r as sought to be contended by GAIL.

[5.8] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the petitioner State that the learned Tribunal has not properly appreciated that once the G

& C allocated gas amongst the customers on pro −rata basis depending upon availability of gas from ONGC, Hazira, GAIL, quantified the required gas in beginning of

the year and gave written instructions to ONGC to plan out its allocation of gas. It is submitted that in the said written instructions, GAIL gave names of its customers and the

q u a n t i t y o f g a s s o a l l o c a t e d . I t i s s u b m i t t e d t h a t i n t h e e v e n t , a n y c u s t o m e r w a n t e d l e s s e r q u a n t i t y o f g a s than allocated, he was under a mandate to inform in advance to GAIL and in turn GAIL

i n f o r m e d O N G C t o r e d u c e s u p p l y a c c o r d i n g l y . I t i s submitted that on the other hand, if for any reason, ONGC reduced its supply to GAIL, GAIL in

turn reduced its supply to its customers proportionately after prior intimation. It is submitted that thus the aforesaid was nothing but a transaction in the nature of inter −State sale o n a b a c k t o b a c k b a s i s . W h i l e p a s s i n g t h e i m p u g n e d j u d g m e n t t h e aforesaid facts have not been appreciated and/or considered properly by the learned Tribunal.

[ 5 . 9 ] I t i s f u r t h e r s u b m i t t e d b y S h r i B h a t t , l e a rned C o u n s e l a p p e a r i n g o n b e h a l f of t h e p e t i t i o n e r S t a t e t h a t t h e l e a r n e d Tribu n a l o u g h t to h a v e ap p r ec i ated t h a t o n c e t h e a ll o c a t i on o f g a s w a s f i x e d a n d d e t e r min e d i n a d v a n c e , i t w a s n o t o pe n f o r G A I L t o a l t e r th e q u a n t i t y u nle s s t h e r e w e r e unforeseen circumstances.

[5.10] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the p e t i t i o n e r S t a t e t h a t e v e n t h e l e a r n e d

Tr i b u na l h a s e r r e d i n no t a p p r e c i a t i n g th e fa c t of t r a n s m issio n o f n a tu r al gas in the present case. It is submitted that HBJ Pipeline did not have any open end. It is sub m i tt e d t h a t t ra n s m ission p i peline s t a r t e d from H a z i ra a n d e nded up at pr e m i ses o f it s v a r io u s c u s t o m e r s . I t i s su b m i t t e d th a t f u r t h e r , n a t u r a l g a s b e i n g a n e x p e n sive co m m o d i ty , t he r e was n o sto r age f acili t y in t he e n t i re system . It i s s u b m it t e d t ha t ev e n t h e r e was n o qual i ty c o ntro l sys t em alo n g w ith H B J Pipel i ne . I t i s s u b m i t t e d t h a t i n this f a c t s i t uati o n t h e l e a r ned Tri b unal o u g h t t o have appreci a t e d th a t once the gas is to be in the pipeline at Hazira, it could not reverse back which employed that becaus e o nc e p ut into s ystem th e s yst e m a n d ended up in the hands of the customers of GAIL only.

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[5.11] It is further submitted by Shri Bhatt, learned Counsel appearing on behalf of the p e t i t i o n e r S t a t e t h a t t h e l e a r n e d T r i b u n a l

ou g h t to h a v e a p p r e c i at e d t h a t t h e ga s w a s s u p p l i e d i n p u r su a n ce t o t h e c o n t r a c t entered i n t o b e t w e e n G A I L a n d its custom e r s o u ts i de G u j a r a t an d t h a t a fte r d r a w i n g nat u r a l g as f r o m O N GC t o Hazir a a n d p u t up in t h e s y stem o f H B J Pipel i n e , c o n s id e r i n g t h e g a s d i r e c t l y t o t h e c u s t o m e r s ‘ premises and, therefore, such contract, auctioning movement of natural gas from Hazira to inter− State, was nothing but sale in the nature of inter−State sale and not stock transfer.

[ 5 . 1 2 ] I t i s furt h e r s u bm i tted by Shr i B hatt , l e a r ned Couns e l a p p e a r i n g on be h al f o f t h e petit i o n e r State t h at i n t h e pre s ent cas e t h e transactions in question can be said to be in the nature of inter−State sale as (1) there is an ar r ang e men t t o s e l l w h ich c o ntains stipul a tion , i n express or implied, regarding the movement of gas from one State to another; (2) in pursuance

o f t h a t a r r a n g e m e n t , t h e g a s i n f a c t m o v e d from one St a t e t o a nothe r ; ( 3 ) ul t i m a t e l y , a c o n c l u d e d s a l e t o o k p l a c e i n the State where the goods were sent and that State is different from the State from which goods m o v e d . I t i s s u b m i t t e d t h a t i n v i e w o f t h e a f o r e s a i d t h r e e c o n d i t i o ns

b e i n g s p e c i f i e d / f u l f i l l e d , t h e t r a n s a c t i o n s i n q u e s t i o n c a n b e c o n s i d e r e d t o b e t h e s a l e i n t h e n a t u r e o f i n t e r −S t a t e s al e . I n s u p p o r t o f h i s a b o v e s u b m i s s i o n s , S h r i B h a t t , l e a r n e d C o u n se l has heavily relied upon the decision of the Hon’ble Supreme Court in the case of M/s. Balabhagas Hulaschand & Anr. vs. State of Orissa reported in AIR 1976 SC 1016.

[ 6 . 0 ] P r e s e n t pet i t io n s a re vehemently oppos e d by S h ri M ihir T ha k ore , learned Counsel appearing on behalf of the respondent No.1 – GAIL.

[6.1] Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 has v e h e m e n t l y s u b m i t t e d t h a t i n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c as e t h e l e a r n e d T r i b unal h a s n o t c o m m i t t e d a ny e r r o r i n h o l d i n g t h e t r a n s a c t i o n s d u r i n g t h e p e r i o d o f 1 9 9 4 −9 5 t o 1 9 9 9 − 00 as being Branch / Stock Transfer . It is vehemently submitted that as such the Hon’ble Supreme Court remanded the matter to the learned Tribunal by observing that

t h e r e a r e i s s u e d w h i c h w o u l d n e e d re s olutions by th e fact finding Tribunal . It is submitted that therefore the matters were rema n ded f o r being heard and disposed of by the learned Tribunal by the Hon’ble Supreme Court to hold the fact finding inquiry into the nature of transactions . It is submitted that the main issue therefore involved in the present petition is with regard to taxability of transaction as being Branch / Stock Transfer or in the course of inter−State sale during the period of 1994 −95 to 1999 −00, whereunder the respondent GAIL has transported n a t u r a l g a s p u r c h a s e d b y i t o n paym e nt of State tax under Section 12 of the GST Act for manufacture of L P G e t c . a t i ts plants outside the State of Gujarat . It is submitted that the

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• ribunal had arrived at a specific fact finding that the natural gas travels from the respondent’s o w n H B J p i p e l i n e t o it s u n i t s i n the S t a t e of Madhya P r ad e s h a nd Sta t e of Uttar Pradesh fo r extr a c t i on / p ro d uction hydrocarbon and petrochemical products such as LPG, Neptha, etc. on which appropriate excise d u t y i s pa i d a n d t h e r emaining l ean gas i s s u pplied to i t s various co n sumers situated in different States where the lo c al sales tax has been paid by the respondent to the respective States . It i s submitted that theref o re the sa i d finding arrived at by the learned Tri b unal ar e not req u i red to be interfered with by this Court in e x e rcise of powers under Article 226 of the Constitution of India.

[ 6 . 2 ] S h r i T h a kore , learned Counsel appearing on behalf of the respondent No.1 – GAIL has further submitted that as such the petitioner is not entitled to any relief a s c l a i med in the present petitions under Articl e 226 of the Constitution of India on the ground of availability of sta t utory rem e dy by way of an appeal as provided u n d e r S e c t i o n 2 0 o f the CST Act and sections 69 of the GST Act.

It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL that as such the petitioners have filed the present petitions

b e l a t e d l y a f t e r e x p i r y o f t h e s t a t u t o r y period of limitation as prescribed under the CST Act and GST Act . It is submitted t h a t t h e p e t i t i o n e r h a d t h e r e m e d y a v a i lable e i t h e r t o p r e f e r a n a p p e a l un d er S e c t io n 2 0 re a d w i t h Sec t io n 9 ( 2 ) o f t h e C S T A c t b e f o re t h e C e n t r a l S a l e s T a x A pp e l l a t e A u t h o rity or to app r o a c h t h e H i g h Co u r t by way of Reference under Section 69 of the GST Act. It is submitted that the orders impugned in the p e t i t io n a r e d a t e d 1 6 . 05 . 2 0 0 5 an d 06 . 07 . 2 0 0 6 and th e pe t i tio n s

a r e f i l e d o n 1 0 . 0 5 . 2 0 0 7 . I t i s s u b m i t t e d t ha t t h e p e r i o d o f l i m i t a t i o n p r e s c ri b e d u n d e r S e c t i o n 2 0 o f t h e G S T A c t is 9 0 da y s w h i ch is ext e n dabl e u p t o 60 days b u t no t b e yo n d 1 5 0 d a ys . I t is sub m itted t h a t t h e pre s ent pet i tio n s ar e fi l e d o n 10 . 0 5 . 2 007 and t h a t too without explaining the reasons for delay.

[6.3] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the r e s p ondent N o . 1 – G AIL tha t the pr e s e n t p e t iti o n s preferred b y the petit i one r s do e s not d es e rve i nterference in a s mu c h a s i t i s a s et t l e d l a w t ha t th o u g h t h e e x e r c i s e o f j u r i s d i c t i o n und e r A r t i c l e 2 2 6 o f t h e C o n s t i tut i o n o f I n d i a i s d i s c r e t i o n a r y a n d w i d e , t h e C o u r t w o uld n ot ex e r ci s e s u c h d iscre t i o n wh e n t here was a s ta t ut o r y remedy a v a i l able t o the pe t it i o n er , wh i ch the p e t i ti o n e r h a s f a i l e d t o a v a i l u n l e s s a n d u n t i l t h e r e a r e e x t r a o rd i n a r y an d e x c e p tio n a l c i r cu m s t an c e s . In s up p o r t o f h i s above s u b missi o n s , S h r i Thakore , learned Couns e l ap p e aring o n b e ha l f o f the r es p o n d e n t N o . 1 – G A IL has h e av i l y reli e d u p o n the dec i sions of the H o n ‘ b l e S u p r e m e C o ur t i n t h e c a s e o f K . K . S r i v a s t a v a n d O r s . v s .

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Bhupendrakumar Jain and Ors. reported in (1977) 2 SCC 494 as well as in the case of Commissioner of Income Tax and Ors. vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603.

[ 6 . 4 ] N o w , s o f a r a s t he s u bmis s ion on b e h a lf o f th e peti t i o n e r w i t h r e s p e c t t o th e j u r i s d i c t i o n o f t h e G u j a r a t S a l e s T ax A p p e ll a te Trib u nal i s concerned, it is vehemently submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL that as such the proceedings of the appeal had been specifically transferred to the Gujarat Sales Tax Appellate Tribunal by the Hon’ble Supreme Court holding that since the issues would need resolutions by a fact finding Tri b unal , t h e mat t ers are remanded for being heard and disposed of by the Gujarat Sales Tax Appellate Tribunal which will determine the issues after notices to the

c o n c e r n e d S t a t e s t o w h i c h t h e l o c a l s a l e s t a x h a s b e en paid and t he Tr i bu n al was direc t ed to dispose of the matter . It is submitt e d t h a t , t h us , onc e t h e H o n ‘ ble S u preme Court has conferred the j u risdiction upon the Gujarat Sale s T ax Appellate Tri b unal b y its name a nd h a s directed t he Tribunal to decide the dispute , the Tribunal had jur i sdiction and w a s compet e nt to decide the appeals u n der the orders of t h e H o n ‘ b l e S u p r e m e C o u r t . I t i s s u b m i t t e d t h at tho u g h , the petitioners co u ld have approached the Hon ‘ ble Supreme Court for clarification , the peti t ioner has never taken any steps and therefore , ha v i n g ac q u i e s c e d t o the jurisdiction of the State Tribunal and therefore, the said issue cannot be agitated now in the

p r e s e n t petit i o ns . It i s s u b mi t t e d t h a t e v e n o th e r w i s e t h e G u j ar a t Sal e s T a x A p pellat e T r i b u nal dur i n g t h e p er i o d at a l l r e levant t i mes h ad th e juris d i c t i o n t o de c i d e t he a p p e als p ref e r r ed by the respondent No.1 – GAIL. It is submitted that even otherwise as such the petitioner has accepted the jurisdiction of the Gujarat Sales Tax Appellate Tribunal to decide the appeals.

[ 6 . 5 ] It i s f ur t h e r s u b m i t t e d b y S h r i T h a k or e , l e a r n e d C o u n s el a p p e a r ing on behalf of the respondent No.1 – GAIL that even otherwise on merits also the present petitions

d e s e r v e t o b e d i s m i s s e d a s t h e l e a r n e d Appellate T r i b u n al h as ri g h t l y decided t he i ssues i n f avo u r o f GAI L a nd with respect to the taxability of the transactions.

[6.6] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the r es p o n de n t No . 1 – GAI L t h at t h e l e a rned Ap p ellat e Tri b u n a l is a st a t utory Tr i bunal speci f i c all y c o n s tituted und e r the GST Act s o le l y t o d e c i de t h e t a xa b i l i t y of t r a n sa c t i o n s e i t h e r u n d e r t h e G S T A c t o r the CST A c t a n d i s , t h e r e f o r e , c o n f e r r e d w i t h t h e a p p e l l a t e p o w e r s to examine the factual and technical aspects involved in the transaction. It is submitted that the

appellate Tribunal being an expert statutory body, the factual and technical findings a r r i v e d a t i t a f t e r h o l d i n g detai l ed in q u i r y into t h e n a t ure o f trans a ct i on may n o t be availa b l e to judicial review under the extraordinary writ jurisdiction of this Court. It is submitted that in the

c a s e o f H . B . G a n d h i , E x c i s e a n d T a x a t i o n O f f i c e r −c u m −

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A s se s s i n g A u t h o r i t y v s . G o p i N a t h and S o n s r e port e d i n 1992 Supp.(2) SCC 312, it is held by the Hon’ble Supreme Court that High Court may not i n t e r f e r e w i t h t h e f i n d i n gs a r r i v e d at by a t e ch n i ca l ly expe r t s t a t u tory T ribu n a l u n le s s and u n t i l s u c h Tr i b u n a l has e x ercise d j u r i s diction n o t v ested in i t or h a s viola t e d th e p r i n c i pl e s o f natural justice or has committed patent error of law and may not enter into re −appreciation of evidence on the ground of insufficiency of evidence or alter the decision because a n o t h e r v i e w i s p o s s i b l e . I t i s submitted that in the present case the petitioner has completely failed to show any of the grounds for judicial review of the decision of the Appellate Tribunal.

[6.7] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL that Article 265 of the Constitution of India provides

t h a t n o t a x s h a l l b e l e v i e d o r c o l l e c t e d e x cept b y a u thori t y of law . I t i s s u b m i t t e d t hat A r t i c l e 2 86 p r o h i bits the S t a te from i m p osi n g or authorizing th e i m p osi t i on o f tax on t h e s a l e s or pur c hase o f goods where such s ale o r pur c h a se t a kes p l a c e d o u t s i de t he State. It is submitted that thus, once the Tribunal upon appreciation of evidence has found that a s a l e i n t h e p r e s e n t c a s e h a s t a k en p l a c e o u t s i d e th e S t a t e o f G u j a r a t , n o t a x c o u l d be d e m a n d e d o r l e v i e d b y t h e petitioner – State of Gujarat.

[ 6 . 8 ] I t i s f u r t h e r s ubmi t t ed b y S hr i T h a k ore , learned C o unsel app e a ring o n b e half of th e r e s p ondent No . 1 – G A I L t h a t t h e f i n d i n g s ar r i v e d at by t h e l e a rned T r ibun a l are n o t o n l y bas e d o n t h e a ppr e c iation o f e v i d e n c e l e d b y b o t h t h e pa r t i e s b u t a l so a f t e r site in s p ect i o n s c a r r i ed o u t b y th e Tribunal itself and therefore, the petitioner could not and ought not to have invoked the writ jurisdiction of this Court for re−appreciation of evidence.

[6.9] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL that even otherwise the transaction in question shows that the

r e s p o n d e n t N o . 1 – G A I L a f t e r purchasing gas on payment of local State tax in the State of Gujarat, takes it to its Hazira premi s e s f r o m where af t e r carrying out certain process i ncluding compre s sion p u ts it in H B J pi p el i n e . H B J p ip e l i ne goes to Vaghodi a i n Gujarat , Jhabua , Khera and Vijapur in Madhya Pradesh and Pata and Auraiya in Uttar Pradesh and fu r ther Rajasthan , Delhi and Haryana e tc . It is su b mitted tha t at the time of putting gas in the HBJ pipeline it is not appropriated towards any of the 218 consumers at the relevant time vis −à − v i s a n y p a r t i c u l a r q u a n t i t y a n d m o v e m e n t o f g a s h a s n ot been o ccasioned to w ards any contract of sale . It is submitted that after supplying gas at Vaghodia in Gujarat, the balance quantity moves further partly to Vijapur in Madhya Pradesh and to Pata in Uttar Pradesh, where after removing LPG, propane, pentene, naphtha, C2C3 etc. on which appropriate excise duty is paid, the remaining lean gas is

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t h e n s u p p l i e d t o i t s v a r i o u s co n s u m er s thr o u gh pi p e l i ne i n st a l l e d by the res p o n den t GA I L a n d f r o m i t s o w n s t a t i o n . I t i s s u b m i t t e d t h a t l e a n g a s i s a d i s t i nct i t e m u n d e r C e n t r a l E x c i s e T a r i f f . I t i s s u b m it t e d t h a t t h u s f r o m the beginning till the gas is supplied to the consumer, the gas remains in the custody and ownership of the r esponde n t No . 1 – GAIL . It is submitted t hat as such till gas reac h es at Ga s Metering Stati o n at t he premi s e s of t he c o n s u m e r a n d t he cons u mer takes t h e deliver y of ga s , n o appropriation takes pla c e . It is submi t t ed t h a t i n f a c t t i l l t h e n i t i s n o t certain what would be the quantity which would be supplied to each consumer and/or whether t h e c o n s u m e r w o u l d t a k e d e l i v e r y . I t i s submitted that thus movement of gas pursuant to the contract of sale with the particular c on s ume r t a kes pl a c e o n l y wh e n t h e c o nsumer a s sent s to tak e de l iv e r y o f g a s of par t i c u l ar q u a lit y and q u a n tity an d the gas thereafter moves further from metering station. It is submitted that until such time GAIL r e t ain s r i gh t o f d i v e r si o n o f g o od s a n d g a s i s c ap a b l e o f b e i n g di v e r te d t o a n y o t h e r c onsu m er . I t i s su b m i tte d th a t a s su c h t he re s p o n den t No . 1 – G A I L h a s pa i d sa l es tax lev i ab l e in di f f e r e n t States which is much higher than the Central Sales Tax, demanded by the petitioner. It is submitted that therefore the transactions in the present case cannot be an inter−State s a l e a n d a s s u c h i s a B r a n c h Transfer / Stock Transfer as rightly held by the learned Tribunal.

[6.10] Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL has h e a v i l y r e l i e d u p o n t h e d e c i s i o n o f t h e Hon’ble Supreme Court in the case of M/s. Balabhagas Hulaschand & Anr. (Supra) in support of his submission that the transaction in question cannot be said to be an inter − S t a t e s a l e . I t i s s u b m i t t e d b y S h r i T h a ko r e , l e a r n e d C o u n s e l a p pe a r i n g o n b e h a l f o f t h e r e s p o n d e nt N o . 1 – GAIL that as such the said decision has been relied upon by both the sides before the learned Tribunal and the learned Tribunal upon appreciation of evidence has found that the transaction in question having been covered under Case 2 as enumerated in the aforesaid decision, the same would not amount to inter −State sales. It is submitted that such finding of fact does not deserve to be disturbed or interfered with.

[6.11] Now, so far as the reliance placed upon the decisions on behalf of the petitioner i.e. Oil I n d i a L i m i t e d ( S u p r a ) ; I n d i a n O i l

Corporation Limited & Anr. (Supra); Hyderabad Engineering Industries (Supra) and IDL Ch e mi c al s Lim i ted ( Su p r a ) a r e c o n c e r n e d , i t i s submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL t h a t t h e a f o r e s a i d d e c i s i o n s s h a l l n o t b e applicable to the facts of the case on hand. It is submitted that in the aforesaid cases the contract o f s a l e w a s b e t w e e n s o l e b u y e r a n d s o l e s e l l e r whic h i den t i f i e d a n d ap p rop r ia t ed t h e goods t ow a r ds the c o n t ra c t of sale with the sole buyer and movement of goods was a result of the sole contract of sale with

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o n l y o n e b u y e r . I t i s s u b m i t t e d t h a t i n t h e present case the respondent No.1 – GAIL has demonstrated on the basis of the decisions of the

H o n ‘ b l e S u p r e m e C o u r t i n c a s e o f B a l a b h a g a s H u l a s c h a n d & A n r . ( S u p r a ) t h a t i n c a s e o f m o v e m e n t o f g o o d s w h er e t h e r e a r e m an y b uy e r s , m o v e m e n t o f g ood s w o uld not b e t r e a ted a s a mov e ment of go o ds to w ards a particular contract of sale unless and until the goods are appropriated towards a particular contract.

[6.12] Now, so far as the reliance placed upon the decision of the Allahabad High Court ( L u c k n o w B e n c h ) i n t h e c a s e o f R e l i a n c e Indu s tri e s L t d . vs . Stat e o f U . P . reported i n 201 2 ( 194 ) ECR 29 3 ( All ) is concerned , i t i s s u b m i t t e d t h a t t h e f a c t s i n t h e s a i d c a s e a r e compl e t e l y di f fer e n t . It i s s u b m i t t e d t h a t t h e A l l a h a b ad H i g h C o u rt i t s el f i n the very d e c is i o n , i n p ara 22 2 , h a s f o und th a t t h e tr a nsactio n i n t h e p r e s e n t c ase is n ot c ompa r a b le w it h th e tran s action inv o lv e d in the c a s e b e f o r e th e A l l a h a ba d H i g h C o urt . It i s s u b m i t ted t h a t t h u s once t h e All a h a bad High C ourt h a s f o u nd that b o th t he t r a nsac t i ons a re di s t inc t a n d d i f f e r e n t , the petitioner could not and ought not to have relied upon the same.

[ 6 . 1 3 ] N o w , s o f a r a s the rel i a n ce p l a ced u p o n the d e c isio n of the H o n ‘ b l e S u p r e m e C our t i n t h e c a se o f B . G . E x p l o r at i o n a n d Produc t ion Ind i a L im i t e d a nd Anr . v s . State of Gujara t , throug h Sec r e t a ry and O r s . r e nd e r e d i n S p e c i a l C i v i l A p p l i c at i o n No . 515 9 / 2 0 1 0 i s c o n c e r n e d , i t i s s u b m i t t e d b y S h r i T h a k o r e , l e a r n e d C o uns e l a p p e a r in g o n b e hal f of the respond e nt N o . 1 – G AI L t h a t a s s uc h th e s a i d deci s ion s u p p o rts t h e case of the respondent No.1 – GAIL that unless and until the goods are appropriated towards a p art i c u l a r c o n t r a c t o f s a l e , the m o v e m en t o f goo d s cannot be t r ea t e d a s mo v e m e n t p ur s u an t to t h e c o n tr a ct of sal e . It is submitted that therefore the aforesaid decisions cited on behalf of the petitioner would not appl y to the f a cts of t h e cas e o n h a n d . S h r i Thakore, learned Counsel appearing on behalf of the respondent No.1 –

GAIL h a s heav i l y re l ied u p o n th e f o l l o w i ng d e c i sio n s i n suppo r t of t h e c a s e of t h e respondent No . 1 – GAIL t h a t transacti o n in qu e stio n c an b e said to be a Branch transfer and cannot be said to be an inter−State sale.

1. Tata E n g i n eerin g a n d L o c o m otive C o . Ltd . vs . Assis t ant Commissioner of Commercial Taxes (1970) 26 STC 354

• Th e C e ment D i s trib u tor s ( P . ) L t d . Da l m i a Pur a m vs . T h e Deputy Commercial Tax Officer, Lalgudi and Ors.

(1969) 23 STC 86

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3. State of Tamil Nadu vs. The Cement Distributors (P.) Ltd.

and Ors.

(1975) 36 STC 389

• M/s. Kelvinator of India Ltd. vs. State of Haryana AIR 1973 SC 2526

• B a l a b h a g a s H u l a s ch a n d a n d A nr . vs . S t a te of O r i s s a ( 1976 ) 37 ST C 207 [ 6 . 14 ] N o w , s o f a r a s the g r i e v a n ce o n beha l f o f t h e pet i tio n er wi t h re s pect t o t h e site inspe c ti o n carrie d ou t b y t h e l e a rne d Tr i b u n a l a nd reliance placed upon such inspection carried out by the learned Tribunal is concerned, it is v e h e me n t l y s u b m i t t e d by Shri Thakore , l e a r ned Counsel appearing on behalf of the respondent No.1 – GAIL that as such the learned Tribunal h a s po w e r s and j u r i s d i c tio n to ca r r y o u t s i t e ins p e c ti o n . It is sub m itted t h at t h e co m p et e nc e of t he T r ibunal h a s n o t b ee n p roh i b i t e d u n d e r a n y s t a tutor y p r o v isio n . I t i s s u b mitted th a t on the contrary the learned Tribunal is empowered to inspect any property or things at any stage u n der Reg u l at i o n 49 of the Gu j ara t S a l e s Ta x Tribunal Regulations, 1973 read with Order XIX Rule 18 of the CPC. It is submitted that the l e a r n e d T r i b u nal , h a v i n g b e e n c l o t h e d w i t h t h e p o w e r s , f u n c t i o n s a nd d u t i e s t o c a r r y o u t f a c t f i n d i ng inq u iries , i s w ell within its competence and authority to do site inspection for ascertaining the true and correct f a c t u a l po s i t io n a n d the pr o c e s s o r p r o c e s s e s involved in the transaction. It is submitted that once the Tribunal finds that a site inspection w o u l d b e h e l p f u l i n f u l l y a p p r e c i a t i n g a n d dete r m i ning t he issu e s arising f o r i t s d ec i sio n , it is c o m pe t e n t to car r y out inspection in the interest of justice. It is submitted that once, both the parties have been afforded opportunity to reflect their stand, the Tribunal may consider the stand of the parties in light of the facts gathered during the site inspection. It is submitted that the Tribunal being a quasi judicial body created with a purpose of deciding complex problems is not bound by the strict rules of evidence and procedure and they are competent to take practical view of the matter to decide complicated and intricate issues.

[6.15] It is further submitted that in the present case the petitioner though was served with an a p p l i c a t i o n f o r s i t e i n s p e c t i o n , h a d n e v e r objected to the same. It is submitted that not only that, the Officers and the Advocates

of the petitioner had participated in the site inspection a nd have a c c e p t e d t h e r e p o r t p r e p a r e d b y t he T rib u n a l . I t i s s u b m i t t e d t h a t no o b j e c t i o n h a s been raise d w ith r egard t o t he s i t e i n s p e c t i o n o r the facts recorded in the report till the order allowing the appeals came to be passed. It is submitted that thus now it is not open for the petitioner to raise such objection and the authority of the learned Tribunal to have the site inspection.

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[6.16] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of th e r e s p o n d e n t N o . 1 – G A IL t h a t t h e l e a r n e d Tribuna l h a s d e c i de d th e is s u e s in v o l v e d i n t h e appea l s af t er g i vin g f ul l opportunities to both the parties and has dealt with the rival submissions and the pleadings as well as d o cu m e nts su b m i tte d by both t h e sides keeping in consideration various authorities cited by both the sides. It is submitted that while dec i d i n g t he i s s u e of m o v eme n t o f g o od s t he Tri b u n al h a s s p e c i f ical l y fou n d t h a t t h e goods m o v e d from H a zir a a re not o n a c c o unt of f u l f i llm e n t o f a ny part i c ul a r ag r e e m e n t or d e m a n d of an y p a r t icu l ar cu s tomer an d thus , i t is cov e r e d u n d e r S e c ti o n 4 o f t h e CS T A c t bei n g t he sal e t aki n g p la c e insid e a State u p on appro p r iati o n of the unas c e r t a in e d go o d s to t h e c o n tract o f s a l e b y th e s e l l e r o r b y t h e b u y e r . I t i s s u b m i tt e d th a t t h u s , n o r u l e s o f p r i nc i p l e s o f n a t u ra l j u s ti c e have been violated by the learned Tribunal.

[ 6 . 1 7 ] N o w , s o f ar as th e re l i a nc e placed upo n i t s expe r t opi n i o n on b e half o f t h e pet i t i o ne r i s c o nc e r n e d , i t is s u b m i t t e d b y S h r i T h akor e , l e a rn e d Co u nsel appearin g o n b eh a l f o f t h e r e s p o ndent N o . 1 t h a t t h e e x p e r t opini o n whi c h h as been relied u p o n by t h e p e titio n e r h a s b e e n pr o d u ce d af t er c onclusion of the a rgumen t s b y t h e r e s p e c t i v e p a r tie s a n d without such examining such expert and thereby without affording any opportunity to cross − e x a m i n e t h e e x p e rt . I t i s s u b m i t t e d t h a t s u c h a document could not be believed or relied upon. It is submitted that even otherwise when such o p i n i o n h a s n o t b e e n b a s e d o n a n y f a c t u a l ve r ifi c a t io n b u t o n l y o n r ead i n g o f t h e co n t r a c t s , the s am e i s not r e q uir e d to be considered . It is f u r t h e r subm i t t ed t h at ev e n the s aid op i n ion is r estrict e d to t h e qu a l i t y o f t h e gas and not on any other aspect of the transaction. It is subm i tted that the expert has merely referred to the contractual terms without any actual experiments on the quality of the g a s at t he time of its injection in HBJ pipeline at Hazira or during its travel through the pipeline or at the time of delivery of the consumers . It is f urther submitted that even otherwise the learned Tribunal has itself cond u c ted the site inspection and after ascertaining the true and correct factual position as well as the process involved in the subject transaction and being completely satisfie d with the same , has arrive d at the conclusion that the sa l e in t h e present case has taken place outside the State of Gujarat and thus no tax could be demanded / levied by the petitioner.

[ 6 . 1 8 ] I t i s f urther submitted by Shri Thakore , learned Counsel appearing on beh a lf of the respondent No . 1 – GAIL that even otherwise the dem a nd of CST amounts to double taxation in view of the fact that local sales tax on the very same gas has been paid to ONGC when the gas was purchased, by the respondent as well as the respective State Governments where gas is ultimately sold to c o n s u m e r s i n r e s p e c t i v e

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S t a t e s . I t i s f u r t h e r s u bmit t ed that such de m and even oth e rwise , is h i gh l y infl a ted inasm u ch a s th e p etiti o n e r has n o t ext e nded bene f i t s of Form ‘C’, set off under Rule 44 of the Rules and waiver under Section 55 of the Act. It is submitted that the petitioner while passing the assessment orders has inflated the figures of assessment by applying the higher rate of tax and by inflating the total sales to the tune of almost 35% for Assessment Year 2000−01, which is also illegal and arbitrary. It is submitted that since the learned Tribunal had decided the issue in favour of respondent No.1 – GAIL, it has not delivered any decision on the issue of inf l ated sales assessed by the petitioner according l y , r e spondent No . 1 – GAIL submits th a t appropriate relief be granted by this Court in this r e gard . It is submitted wi t hout admitting that the CST i s paya b le on the ga s , if this Court comes to the conclusion that the same i s p a y a b l e t h e n i t i s p r a y e d t h a t t h e p e t i t i o n e r b e d i r e c t e d t o r e −q u a n t i f y t h e d e m a n d b y e x t e n d i n g t h e b e n e f i t s o f F o r m ‘ C ‘ , s e t −o f f u n d e r R u l e 4 4 and waiver under Section 55 of the Act and also be pleas e d to direct respect i ve State G o vernments to refund t h e sales tax colle c ted b y t hem d uring the per i o d i n q u e s t i o n a n d w h o h a d b e e n s p e c i f i c all y joined a s parties to the present proceedings by the Hon’ble Supreme Court vide order dated 01.02.2005.

I t i s f u r t h e r s u b m i t t e d t ha t n o r e qu i r e m e n t o f s u b m i s s i o n o f F o r m ‘C’ arose so far as these forms were not necessitated in view of judgment of Tribunal that the s u b j e c t t r a n s a c t i o n s w e r e n o t i n t e r −S t a t e s a l e tra n s a c t io n s . It is sub m itted tha t s i n c e i t is not p ossi b le t o p r oduce forms at thi s s t age , G A IL m a y n o t be p e n a l i z e d f or n o f a u l t o f i t . It i s s u bmit t e d that since supply of natural gas made by GAIL were eligible for Form ‘C’ as per conditions prescribed un d e r s ec t io n 8 ( 3 ) of t h e C ST A c t , t h e requirement of forms may be waived / relaxed by this Court.

In su p por t o f h i s a b ov e su b m i s sio n s , Shri T h a k o r e , l e arned Counsel appearing on behalf of the respondent No.1 – GAIL has relied upon the following decisions.

1. Ambica Steels Ltd. vs. State of Uttar Pradesh (2009) 14 SCC 309

• Sri Lakshmi Coconut Industries vs. State of Karnataka 1980 (46) STC 404

• Sahney Steel & Press Works Ltd. vs. CTO AIR 1985 SC 1754.

[ 6 . 1 9 ] I t i s f u r t h e r s u bm i tted by S h r i Thakore , l e a rn e d Counsel app e a r i n g o n b e h alf o f the re s p o n d e n t N o . 1 – GAIL t h a t A r t i c l e 265 of t he C o n s t i t u t i o n o f I n d i a p r o v i d e s t h a t n o t a x s h a l l b e l evie d o r c o l l e ct e d e x c e p t b y a u t h o r i t y of la w . It is s u b mitt e d t h at now , A r t icle 28 6 o f t h e C o nstitut i o n o f I n dia pr o h ib i t s a S t a t e f r o m i m p o s i n g or a ut h o r i z ing t h e im p osit i o n o f t a x o n the sale o r p u rc h as e o f g o o d s w h e r e su c h s a le o r purchase takes place outside the State.

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[ 6 . 2 0 ] I t i s f u r t h e r s u b mi t t ed b y S hri T h a kore , lea r n e d C o u nse l appearing on behalf of the respondent No.1 – GAIL that Article 246 read with Entry 92A of List

I o f S e v e n t h S c h e d u l e t o t h e C o n s t i t u t i o n empowers the Parliament to make law with respect to taxes on the sale or purchase of goods other than news papers, where such sale or purchase takes place in the course of inter− State trade or commerce. It is submitted that thus, in exercise of its constitutional powers t he Pa r l i a m e n t h as e n acted C S T A c t . I t is s u b m i t t e d t h at unde r Ch a pte r II of t h e CS T A c t , p rovi s io n s a re mad e f o r m ulatin g princ i p l e s f o r de t e r mini n g w hen a s ale o r p u rc h a s e o f g ood s takes placed i n t he co u rse o f in t e r − State trade or commerce or outside a State or in the course of import or export. It is submitted that Section 3 of the CST Act formulates the principle for inter −State trade or commerce and Section 4 formulates principle for sale or purchase of goods outside a State.

[6.21] It is further submitted by Shri Thakore, learned Counsel appearing on behalf of the respondent No.1 – GAIL that reading of Section 3 of the CST Act more p a r t i c u l a r l y c l a u s e ( a ) o f s e c t i o n 3 sugge s t s t h a t s e c t ion 3 ( a ) o f t h e C S T Ac t is a p p l i c a b l e o n l y w h en t h e m o v e m e n t o f g o o d s t a k e s aft e r a p p r o p r i a t io n t o w a r d s t h e c o ntr a c t f rom one State to another pursuant to a contract of sale or an agreement to sale. Thus, until the goods

a r e i d e n t i f i e d a n d a p p r o p r i a t e d t o w a r d s a p a r t i c u la r c o n t r a c t o r ag r e e m e n t , t h e r e w o u l d n o t b e a n y mo v e m ent of go o d s as e n v i s a g ed un d er s e c t i o n 3 of t h e A c t . A s a g a i n s t t hi s , s e c t i o n 4 of the CST Act and in particular sub −section (2) of section 4 expressly provides that in case of unascertained or future goods, sale of goods takes place inside a State when the goods are appropriated to the contract of sale by the seller or the buyer. It is submitted that it would thu s b e v i t a l t o a s c e r t a i n w h e n t h e ‘ a p p r o p r i a t i o n o f g o o d s ‘ t a k e s p l a c e . It i s s u b m i t t e d t h a t a s h e l d by th e Hon ‘ b l e Sup r e m e C o ur t i n s e ries of d e c i sions , the ‘ appr o priatio n o f g o o d s ‘ t a k e s p lace w he n the g o o d s a r e being i n c a pable o f b eing div e rt e d t o a n y oth e r p e rson t h an th e buyer . It is submitted that hence, no central sales tax would be leviable on the movement of unascertained

g o o d s n o t a p p r o p r i a t e d t o w a r d s a n y particular contract as such levy would be without authority of law.

[ 6 . 2 2 ] I t i s f u r t h er submitted by Shri Thakore , learned Counsel appear i ng o n behalf of the respondent No . 1 – GAIL that even otherwise in the present case the provisional assessment under Section 41B of the GST Act was not permissible and sustainable under the law . It is su b mitted by Shri Thakore , learned Counsel appearing on behalf of the respondent No . 1 – GAIL that the power of provisional assessment under Section 41B of the GST Act is available to the Commissioner only in case wh e re he has reason t o believe that the dealer has evaded the tax . It is submitted by Shri Tha k ore , l e arned Counsel appearing on behalf of the responden t No . 1 – GAIL that this provision and more particularly the p h r a se ” has reason to believe that the dealer has evaded the tax ” has

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c o m e u p f o r c o n s i d e r a t i on before this Court on number of o c casions and in all such cases different Division Benches of this Court have taken a view that the expression ” e v a s i o n o f t a x ” c o n v e y s m e n s r e a . I t i s submitted that in the case of Batliboi & Co. Ltd. and Anr. vs. Sales Tax Officer Class−I Division− 1 and Ors. reported in (2000) 119 STC 583 it is held that the evasion of tax on the part of

dealer means that by infringing the law the dealer has been trying to avoid the payment of tax. It is submitted that in the case of Cheminova India Ltd. vs. Sales Tax Officer reported in ( 20 0 2 ) 1 2 6 S T C 3 3 4 this Court has held that when the Sales Tax Officer has

p r e v i o u s l y a s s e s s e d t h e d e a l e r o n t h e interpretation canvassed by the dealer and if such belief is entertained by the dealer for the subsequent y ears to pay the tax , the same is a bonafide beli e f and wo u ld not a mount to evasion of tax . It is further submitted by Shri Thak o re , learned Coun s el a ppearing on b e half of the respondent No.1 – GAIL that in the case of Natraj Rubbers and Anr. vs. Sales Tax Officer Division− 3 , B h a v n a g a r r e p o r t e d i n ( ! 9 9 9 ) 1 1 3 S T C 5 7 5 , t h i s C ourt h a s h e l d t h a t p u t t i n g f o r t h o f a c l a i m b y a d e a l e r f o r provision of law inviting lesser amount of tax cannot be considered an act of evasion because that would tantamount to denying even the fundamental liberty to the tax payer to q u e s t i o n a n d a s k f o r p r o p e r determination of his tax liability in accordance with law which according to him applies to it. It

i s fu r t h e r submitted b y S h r i Thakore , learned Counsel appearing on behalf of the respondent No.1 – GAIL that in the present case the petitioner has assessed respondent No.1 for the assessment years 1987 −88 to 1992 − 9 3 t r e a t i n g t h e t r a n s a c t i o n a s B r a n c h Transfer. It is submitted that thus, the petitioner and respondent No.1 both had treated the

t r a n s a c t i o n i n q u e s t i o n a s B r a n c h T r a n s f e r . I t i s s ub m i t t e d t h a t f urther , re s po n dent N o . 1 u p on p u r ch a s e of natu r a l gas fr o m ONGC Ltd . has p a id t ax at the r ate o f 4% p a ya b l e under Sec t ion 1 2 of the GST Act w hil e tr a nsf e r r ing n atur a l g as t o i t s L P G pl a n t in V i j a y p ur ( Bij a p u r ) M a d h y a P r a d e s h . I t i s sub m i t te d t hat resp o nden t no . 1 h as al s o pai d l o cal s a le s ta x in each St a t e w h ere v e r s a l e h a s take n pl a ce . I t is s u bmitted t ha t r esponden t No . 1 h a s f u r n ished de t a i l s o f paym e n t o f tax at p a g e s 8 69 a n d 8 7 0 w h i c h s h o w t h a t r e spo n dent No . 1 h ad t o s hou l d er higher burden of local tax than the Central Sales Tax payable under the CST Act. It is submitted

t hat th u s , in th e facts o f the p r e s e n t c a se it c ann o t b e said th a t r e s po n d e n t N o . 1 h a d b e e n t r y i n g t o a v o i d p a y me n t o f t a x , w h e n i n f a ct r e s p o nd e n t N o . 1 h a s p a i d h i g h e r ta x t o othe r S t a t e s . It is submitted that respondent No.1 is a Government company set−up for administering and main t a i n i ng s a le o f na t ural g a s t o e ns u r e e ff e c t i ve d i s tri b u t i o n o f g a s a m o n g s t t he b u y e r s a l l o v er I n d i a w h i c h i s a l l o c a t e d by Gas Linkage Committee of Government of India. It is submitted that thus, respondent No.1 is

n o t a p r i v a t e i n d i v i d u a l t o i n d u l g e i n t o profiteering by evasion of tax as the profits accrued to respondent No.1 are even otherwise public money. It is submitted that from the year 1987 −88 till the issuance of show cause

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n o t i c e o n 0 1 . 0 9 . 1 9 9 9 i . e . f o r alm o st a round a p er i o d o f 15 ye a r s , both the peti t ioner and r e spo n de n t No.1 have treated the transaction in question as Branch Transfer. It is submitted that thus, a l l e g a t i o n o f e v a s i o n o f t a x i s c o m p l e t e l y unsustainable, illegal, unreasonable and unjustified.

[ 6 . 2 3 ] I t i s f u r t h e r s u b m i t t e d b y Sh r i Th a k o r e , l e a r n e d C o u n s el ap p e a r in g on b ehal f o f the resp o nd e nt No . 1 – G A I L tha t t he p e t itio n er i n the order of provisional assessment at pages 230 and 231 has concluded that the State

o f Guj a r a t ca n not be de p rive d of its legiti m a t e r i g ht o f le v ying Cen t r a l S a l e s T a x , ot h e r w i se , it is b o u nd t o a d v e r s e l y affe c t t he St a t e c a p aci t y f o r e a r ni n g revenue on le g itimate bu s i n ess i n si d e t h e ta x . I t i s submitt e d t h a t t h i s i s t h e o n ly r e aso n g i v e n b y t h e p e titi o n e r f o r i n v o k i n g p o we r s u n d e r S e c t i o n 4 1 B o f t h e G S T A c t . I t i s s u b m i t t e d t h a t as s u ch t h e rea s on whic h i s ba s e d only on the fact t h a t t h e S t a t e may have lost revenue would never qualify as a pre −condition or reason to believe for invoking p o wer s u n de r S e c t io n 4 1B of t h e G S T A c t . I t i s f ur t h er su b m i tt e d b y S h r i Thakore , learned C oun s el appearing on behalf of the r espondent No . 1 – G A I L th a t i n t h e c ase o f N u m e ch E m b a l l a g e L t d . vs . S a l e s T a x O f f i c e r a nd A nr . r e p o r t e d i n ( 2 0 0 2 ) 1 2 5 S T C 3 4 0 , th i s Cou r t h a s hel d that mere a ss e r tio n th a t a l ar g e amo u n t o f t a x w a s in v o l ved a nd the re g u l a r a s ses s m e n t was l i k e l y t o t ak e t im e c an n e v e r be t he gr o und f o r formati o n o f rea s on a bl e opinion for makin g provi s i o n a l a s s e s s m e n t . I t i s s u b m i t t e d t h at h o we v er , in th e afo r e s aid d ecision , t h is Court speci f ical l y fou n d o n facts tha t t h e i nc r i m ina t i n g t ransactions were d e tected by the Sales Tax Authorities , whereby in the garb of Branch Tr a nsfers , goods were directly diverted to the buying parties and thereby this Cou r t found that in view of such incriminating material establishing mens rea provisions of section 41B are applicable . It is submitted that in t he present case , there is no such finding or observation that the goods are directly transferred to the buyers before processing at LPG Plant of respondent No.1 – GAIL.

[6.24] Now, so far as the reliance placed upon the decision in the case of J.K. Corp. Ltd. vs. S a l e s T a x O f f i c e r a n d A n r . r e p o r t e d i n ( 2 0 0 6 ) 145 STC 257 as well as in the case of Asian Paints India Ltd . v s . D e p u t y C o m m i s s i o n e r o f S a l e s T a x C i r c l e −2 6 r e p o r t e d i n ( 2 0 0 6 ) 148 STC 532 relied upon by the learned Counsel appearing on behalf of the petitioner in support

of the sustainability of the provisional assessment under Section 41B of the GST Act is concerned, it is vehemently submitted by Shri Thakore, learned Counsel appearing on be h alf of the respondent No . 1 – GAIL that on facts the said decisions shall not be applicable to the facts of the case on hand.

[ 6 . 2 5 ] It i s fu r ther s u bmitted by S hri Thakore , learned Counsel appear i ng on behalf of the respondent No . 1 – GAIL that as such in the

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p r e se n t c a s e t h e l e a r n e d Tribuna l i n para s 8 4 a n d 8 5 w h i l e se t t i n g a s i d e th e ord e r o f p r o v isio n a l assessmen t h a s cl e arly found that the Assessing Officer has not ma d e out a n y malafide intent i o n f r o m t h e d o c u m e n t s o r e v i d e n c e a n d t herefore , the whole transaction at the most can be treated as misinter p reta t ion of provisions of law . It is submitted that in view of such po s i tion of la w and t h e r e co r d of t h e p r e s ent c a se , t h e petitione r had n eit h er formed an opi n ion nor was there any action to form such an opinion that the respondent No.1 has evaded the tax. It is submitted that on this ground also, the provisional assessment orders for the years 1994−95 to 1999−00 deserve to be q u a s h e d a n d s e t a s i d e a n d accordingly , the learned Tribunal has rightly q u a s hed a n d set a sid e the respective provisional assessment orders.

[ 6 . 26 ] It is f u rth e r s ub m i t ted by Shri Thakor e , l e arned Counsel appearing on behalf of the respondent No.1 – GAIL that under Section 22(1B) of the CST Act, t h e C e n t r a l S a l e s T a x A p p e l l a t e T r i b u n a l h a s been emp o wered to refund the tax paid to a particular State o r in the alternative to direct that the State to transfer the refundable amount to the State to which the c e n t r a l s a l e s t a x i s d e e m e d o n t h e s a m e t ransaction . It is submitted that therefor e i n t he p r e s e n t c as e t h i s C o u r t m a y al s o d ire c t o t h er res p ondent State s t o r e fund t h e local t ax pa i d by the r e s p ond e nt No . 1 – GAIL t o t he r e s p e c tive St a t es o r in th e a l tern a t ive to direct the respondent States to transfer the refundable amounts to the petitioner State.

[ 6 . 2 7 ] It i s f u r t h e r s u b m i t t e d b y S h r i T ha k o r e , l e a rned C o u n s e l appe a r in g o n beh a l f o f the respo n den t No . 1 – G AIL th a t the petition e r though had an alternative remedy before the Central Sales Tax Appellate Authority, did not avail t h e s a m e w i t h i n t h e p e r i o d o f l i m i t a t i o n a n d t h e rea f t er has f i l ed the p r e s e n t pe t i t io n , t he sco p e of t h e p e tit i o n wou l d b e aki n

t o t h e scope o f ap p e al b e fore th e said A uthori t y and t her e f ore , th i s Cour t un d er Art i c le 2 2 6 o f the C ons t i t u t i o n of I n d i a m a y d i r e c t s u c h refund to do the complete justice to the parties to the proceedings.

M aki n g a b o v e s ub m i s s i o n s a n d re l y in g u po n a b o v e d ec i s i o n s , i t i s requested to dismiss the present petition.

[ 7 . 0 ] In r e p ly t o t h e s u b mis s i o n s ma d e by Sh r i Th a ko r e , l earn e d Cou n se l app e a r i n g on b e h a l f o f t h e r es p o n d e n t N o . 1 – G A I L a n d m o r e particula r l y w i t h r e s p e c t t o t h e m a i n t a i n a b i l i t y o f th e pr e sent petitions , it is vehemently submitted by Shri Bhatt, learned Counsel appearing on behalf of the petitioner t h a t a s t h e r e a r e a l l e g a t i o n s o f b r e a c h o f princ i p l es o f na t u r a l j u s t i c e a n d t h e alle g at i o ns o f b re a c h o f p r o c e d u r e / site inspection and according to the petitioner, no rule prescribed such mode, the present petitions under Article 226 of the Constitution of India shall be maintainable more

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particularly when in the present petitions, the petitioners have also challenged the rejection of M.A. (Rectification Application). In support of the maintainability of the p r ese n t pe t ition , Shri B h at t , l e arned Couns e l appea r i n g on b eh a lf o f t h e petitioners has relied upon the decisions of the Hon’ble Supreme Court in the case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Ors. reported in

( 1 9 9 8 ) 8 S C C 1 1 ; H a r b a n s l a l S a h n i a A n d A n r . v s I n d i a n Oi l C o r p n . L t d . An d O r s . r e p o r t ed in A IR 2 0 0 3 S C 2 1 20 ; Du r ga Hotel Compl e x vs . RB I r e p o r ted i n AIR 2007 SC 1467 as w e ll as t h e d ecisi o n of t h e Fu l l B e nc h o f t h i s Cour t in t h e ca s e of P a n o l i Intermediate (India) Pvt. Ltd. vs. Union of India & Ors. reported in AIR 2015 Guj 97 (FB).

[ 7 . 1 ] I t i s f u rth e r su b mitte d b y S hri Bhatt , le a rned C o u n s e l ap p ea r i n g on behalf of the petitioners that even otherwise once the petitions are admitted, the petitions may not be dismissed on the ground of availability of statutory remedy available. In support of his above submissions, he has relied upon the decision of the Hon’ble Supreme Court in the case of Durga Enterprises (P) Ltd. vs. State of U.P. as well as in the case of

A r i d a y N a r a i n v s . I . T . O f f i c e r , B o m b a y r e p o r t e d i n AIR 1971 SC 33 as well as the following decisions of this Court.

1. Vice Chancellor vs. Kartik Bhatt Professor 2015 AIJEL HC 23849 (LPA No.1000/2015, decided on 29.06.2015)

• N e s t le I n d i a L t d . vs . D e puty C o mmi s s i on e r o f C om m e r c ial T ax 2015 AIJEL SC 234180 (SCA No.15842/2012)

• Saritaben Arora vs. Dineshchandra Gadhiya 2015 (1) GLR 656 (Para 7)

• Tata Chemicals vs. Adityana Nagar Panchayat 2001 GLH (1) 583 (SCA No.7597/1991 Decided on 30.08.2000) [8.0] Heard learned Counsel appearing on behalf of the respective parties at length. The short question which is posed for consideration of this Court is with respect to the taxability of transaction/s as being Branch / Stock transfer (as contend e d o n b e h a lf o f th e r e sp o ndent – GA I L ) or i n t h e c o ur s e of i n t e r − State sale during the period 1994 −95 to 1999 −2000, whereunder the respondent GAIL has transported natural gas purchased by it on payment of State tax under Section 12 of the GST A ct f o r m a nufa c t u r e o f L P G e t c . a t it s plant outside the State of G u jarat . A f t e r hold i ng inqui r y on i t s o w n a n d after giving f u lles t o ppor t u n ity to the respective parties and thereafter considering the material on record the learned Tribunal had arri v e d a t a s p e ci f i c f a c t f i n d i n g t h a t t h e natural gas travels through the GAIL’s own HBJ pipeline to its unit in the State of M.P. and State of U . P . f o r extraction / production of hydrocarbon and petrochemical products such as LPG, naphtha etc. on which appropriate tax d ut y i s pa i d a n d the remaining l ean gas i s supplied to its various consumers situated in different States where the local sales tax has been

paid by the GAIL to the respective States. Thereafter, the learned Tribunal has come

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to the conclusion that the transactions in question cannot be said to be in the course of inter− State sale. The findings recorded by the learned Tribunal shall be discussed hereinbelow.

[ 8 . 1 ] Bef o r e deali n g w i th a n d / o r c o n s i d e r i n g t h e s ub m i s s i on m a d e b y t h e lea r ne d C o u ns e l o n b e h a l f o f t h e r e s p e c t i v e p a r t i es o n m e r i t s o f t h e i ssue w h e t h e r t h e t r a n s a c t i o n s i n q u e st i o n c a n b e s a i d to b e Bran c h / Stock transfer or in the course of inter−State sale, few objections raised by the learned Counsel appearing on behalf of the respective parties shall be considered first.

[8.2] It is the case on behalf of the appellant State that in view of provision of sectio n 1 9 o f t h e CST A c t a s p er t h e Cent r al Sales Tax ( A m e n d m e n t ) A c t , 2 0 0 1 w h i c h c a m e i n t o f o r c e w . e . f . 17 . 03 . 2 0 0 5 , it w a s Central Sales Tax Appellate Authority only who can have jurisdiction to settle the inter − S t at e di s pute s . I t is s ubmit t ed that in t he p re s ent case t h e d is p u t e can be sai d to b e b e t w e e n t h e St a t e of G ujar a t a nd o t h er St a t e s . S u ch d i s p u t e c o u l d h a v e b e e n d ec i d e d b y t he C e n tr a l S al e s T ax A p p e l l a t e A uthor i t y o nl y . T h e re f o re , i t i s t h e c a s e on b eh a l f of the ap p el l a nt t h a t t h e i m p u g ned o r de r p a s s e d b y t h e le a r n e d G u j a r a t S a l e s T a x A ppel l a t e Tr i buna l i s wh o l l y w i thout j u r isdi c t i o n . T h e a f o r esa i d has no s ubsta n c e . A t t he o u ts e t it i s r e qui r e d t o be no t e d t h at a s su c h the m a t t e r s were remanded by the Hon’ble Supreme Court to the Gujarat Central Sales Tax Appellate Tribunal a n d t h e H o n ‘ b l e S u p r e m e C o u r t d i r e c t e d t h e respond e n t GA I L t o app r oach th e G u j a rat Sales Tax Appe l l a te T r i bu n a l by s pe c if i c all y o bserving that the l e arned Tribunal will b e in a po s i t i o n t o a pp r e c i a t e a n d / o r c o ns i d e r t h e i ssue bei n g a fact f indi n g Tribunal . Even o therwise it is required t o be n o t e d that t h e dispute i s f o r the period prior to the amendment in Section 19 which had come into force w.e.f. 17.03.2005. The Central S a l e s T a x A p p e l l a t e A u t h o r i t y c a m e t o b e constituted w . e . f . 17 . 03 . 2005 a nd as such much prior to the aforesaid , the respondent was relegated to approach the Gujarat State Sales Tax Appellate Tribunal and therefore, at the time when the respondent preferred appeal before the Appellate

T r i b u n a l , n o s u c h C e n t r a l S a l e s T ax Appellate Authority was in existence . As observed herein above the Hon’ble Supreme Court relegated the respondent herein to approach the Gujarat Sales Tax Ap p ell a te Tribunal and thereafter the respondent approached the Appellate Tribunal. If at all the appellant was having any objection with respect to j ur i sdiction , the appellant could have and ought to have approached the Hon’ble Supreme Court for modification and/or clarification.

[8.3] Even otherwise considering the issue / question involved, it cannot be said that the dispute is inter −State disputes between two States. Dispute is between GAIL – a d e a l e r a n d t h e S t a t e o f G u j a r a t . Dispute b etween the parties is whether the transactions in question and supply of gas by GAIL can be said to be a Branch / Stock Transfer or in the course of inter −

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S t a t e s a l e . S e c t i o n 1 9 a m e n d e d s h a l l b e a p p l i c a b l e only i n a c a s e w h e r e d i s p u t e i s b e t w e e n t w o S t a t e s and t he Ce n t r a l Sale s T a x A p p e l l a t e A u t h o r i t y i s c o n f e r r e d w i t h t h e p o w e r t o s e t t l e i n t e r −S t a t e s a l e . T h a t i s n o t t h e c a se her e . U n d er th e c i rcumstances, t he object i ons raised on behalf of th e appellant on th e j ur i s d ictio n o f t h e Guj a ra t Sales Tax Appell a t e T ribunal h a s no s u bstance and a re hereby rejected . It is requ i red to be noted that even subsequently by Act No . 3 of 2006 , section 25 of the CST Act has be e n amen d ed and the T ribuna l i s again vested w i t h t h e j u r i s d i c t i o n e v e n t o d e c i d e t h e i s s u e i n t e r −S t a t e . T h e r e f o r e , a t the time when the learned Tribunal has passed the impugned order, the learned Tribunal was having and/or the learned Tribunal was vested with the jurisdiction.

[ 8 . 4 ] I t is the ca s e on behalf of the respondent GAIL that against the impugned judgment and order passed by the learned Appellate Tribunal, the petitioner was ha v ing the a lternative remedy available by way of appeal under Section 20 read with Section 9 ( 2 ) of the CST Act before t h e Cen t ral Sales Tax Appellate Authority or to appro a ch the H igh Court by w ay o f a reference u n d e r S e c t ion 69 o f t h e G S T A c t a n d t h e re f o r e , p r esent p e tition s m a y n ot b e e n te r t a i n e d i s c o n c e r n e d , a t t he o u t s e t i t i s required to be noted that once the petitioners are admitted by the High Court, thereafter, ord i n a r i ly t h e s a m e s h a ll n o t b e d i s m is s e d o n t he g r o u n d o f a v a i l a b i l i t y of a l t e r n a t i v e r e m e d y . A si m i l a r o b j e ct i on h a s b e en o v e r − ruled by t h e Divis i o n B e n ch of t h i s C o u rt i n the cas e o f N e stle I n dia Lt d . ( S upr a ) a s w e l l a s i n t h e c ase of K a r t i k Bh a t t Pr o f e s so r ( S u p r a ) . I n a pet i t i o n u n d e r A r t i c l e 22 6 o f the C o nstit u t i o n of In d i a , iss u i n g R u le is not a n a mpl e formality . I ssu i ng R ul e means a f t er , c o nsid e r i n g t h e m at t e r and even considering the preliminary objections, if any, the High Court has entertained the petition

a n d h a s c o n s i d e r e d i t t o b e a c a s e t o b e c o n s ide r e d on meri t s . T h e r e f o r e , w hile is s u i n g a R u l e , t h e r e i s a l w a y s application of mind by the Court with respect to maintainability and/or entertainability of the p e t i t i o n . T h e r e f o r e , o n c e R u l e i s i s s u e d , a s p e r catena of decisions of the Hon’ble Supreme Court as well as this Court, thereafter normally the same may not be dismissed on ground of availability of alternative remedy. At this stage the decision of the Hon’ble Supreme Court in the case of Durga Enterprises (P) Ltd. vs. State o f U P reporte d in ( 20 1 4 ) 1 3 S C C 66 5 is al s o required t o be re f er r ed t o . I n t h e s aid d e ci s io n the H o n ‘ bl e Su p r e m e C ourt h a s obs e rv e d and hel d t h at o nc e High Court h a vi n g enterta i ned the wri t petit i on i n which pleadings were also complete and which was pending for a long period of 13 years, the same could not have been dismissed on the ground that there is a remedy of civil suit. Even otherwise there are allegations of violation of principle of natural justice. Considering the aforesaid facts and circums t a n ces the o b j e c t i o n s r a i s ed o n b e h a l f o f t h e r e spo n d e n t GAI L not to con s id e r the present p etitions on merit on the ground that the petitioner has a statutory remedy available cannot be accepted now and after so many years. Under the circumstances, the said objection is hereby over−ruled.

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[ 8 . 5 ] N o w , s o f a r a s t h e n e x t o b j e c t i o n o n b e h a l f o f t h e p e t i t i o n e r o n t h e si t e in s p e c t i o n s c a r r i e d o u t b y t h e l e a r n e d Tr i b u n a l i t s e l f a n d r e g a r d i n g t h e f i n d i n g o n s i t e i ns p ec t ions c a r r i e d o u t b y t h e l e a r n e d T r i b u n a l i t s e lf i s co n ce r n e d , it is requ i r ed to b e noted th a t t he appellate Tribunal is a statut o ry T ribu n a l specifically c o n s t it u t e d u nd e r t he G ST A c t sol e ly to d e cide taxability of transac t ions e ither under the GST Act or CST Act and is, therefore, conferred with the appellate powers to examine the factual and technical jobs involve d in the transaction . Therefore , t he l earne d T ribu n al has powers and jur i sdiction to carry out s i te inspection to arrive at a just conclusio n . Ther e does not appear t o be any prohib i t ion u nd e r the A ct t o ca r ry o u t s u ch site inspections which the learned Tribunal has thought it fit to carry out to come to the just conclusion. If the Tribunal finds that such inspection would be helpful in fully appreciating and determining t h e issues arising f or its decision , it is always open for the Tribunal a n d the Tribu n al is compet e nt to carry out i n spe c tion in the int e r e s t o f j u s tic e . It is req u i red t o b e n o t e d t h a t a s s u c h b o t h the p a rt i e s h a v e be e n aff o r d e d o p p o r t u n it y t o ref l e c t t h e i r s t a n d . I t i s r e qu i r e d t o b e noted that in the present case the petitioner though was served with an application for site i n s p e c t i o n , t h e y n e v e r o b j e c t e d to t h e sam e . I t appears that not only that even the Officers and/or the Advocates of the petitioners participated in the site inspection and even accepted the report prepared by the Tribunal. There d o e s n o t a p p e a r t o b e a n y o b jectio n s r a i sed w ith r e ga r d t o th e s i t e i n sp e c t i o n or t h e fac t s r ec o rded in t h e re p o r t t i l l t h e o r d er a l l o w i n g th e appeal s cam e t o b e pa s se d . Th u s , now i n th e p e t i ti o n befo r e t h e Cour t , th e re a fter it w i l l not be open f o r the petitioner to raise any objection on the site inspection carried out by the learned Tribunal. Therefore, the submission on behalf of the petitioner now on site inspection carried out by the learned Tribunal itself cannot be permitted to be raised now. Under the circumstances, such objection raised on behalf of the petitioner is hereby over−ruled.

[ 8 . 6 ] N o w , s o f a r a s th e m a i n is s u e o n m e r i t s w h e t h e r th e t r ansa c tion / s in quest i o n a r e Br a nch / S t o c k T r a n s fe r as c o n ten d ed on b e h a l f of th e respondent GAIL or in the course of inter−State sale (as contended on behalf of the State) and the legality and validity of the impugned judgment and order passed by the learned Tribunal on merits is concerned, while considering the aforesaid questions, the findings recorded by the learned Tribunal are required to be considered which are the findings on facts

o n a p p r e c i a t i o n o f e v i d e n c e o n r e c o r d m o r e p a r t i c u larly th e s i t e i ns p ec t i on c a r ried out b y the learne d Tribu n a l itse l f as w ell a s the releva n t a g r eement s entered i n t o between GAIL and it s c ustome r s viz . M / s . T at a Ch e m i c a l s L t d . and Ors . The l e arned Tribunal has co n sidered in d e t a i l t h e a g r e e m e n t be t w e en t h e G A IL a n d M / s . T a t a Chemicals Ltd. by way of example. The relevant findings of the learned Tribunal considering the m a t e r i a l o n r e c o r d a n d o n i n t e r p r e t a t i o n o f and/or considering the agreements between GAIL and its customers in nut−shell are as under:

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1. T h a t t h e s u p p l y t e r m i s not f o r f i x e d quant i t y b u t i t g e ts c h a n g e a s per circumstances and so power of reduced quantity is given.

• T h e q u a l i t y o f th e g a s t o b e s up p l ied t o th e b u y e r w as a c c o r d i n g t o the satisfaction laid down in Annexure−1 to the agreement;

• T h a t t h e S t at e / De p artm e nt does not p r ove tha t th e na t u r al g a s put up in HBJ pipeline at Hazira is of specification mentioned in Annexure−1 to the agreement;

• T h at t h e n a t u r a l g a s purc h a s e d b y G AIL f r o m ON G C af t e r h a v i n g compressing it, is put in HBJ Pipeline and at various stations of GAIL situated at Vijapur (M.P.), Auraiya (U.P.), Kheera (M.P.), Jhabua (M.P.), Hazira (Gujarat), Vaghodia (Gujarat)

• T h a t afte r t h e g a s reach e s t o such s t a t io n s th r ough HBJ Pi p eline , i t further gets processed, just like removing contents from the gas received from HBJ pipeline, s o m e p u r i f i c a t i o n p r o c e s s i s d o n e , L P G i s t aken o u t a n d th e rea f t er a f t e r c o m p r e s s i n g e t c . t h e g a s w i l l f u r the r g o t o c u s t o m e r . T h e r e for e , t h e g a s put u p b y GA I L i n H B J Pipeline at Hazira is not in pursuance to the agreement entered into by GAIL with customer to

fulfill the need of the sale agreement or fulfill the said agreement;

• T h e a g r e e m e n t o n l y co n ta i n s t he maxi m um qu a n t i t y t o s u p ply pe r day an d qua l ity o f w hich i s to b e s u p p l i e d b y GAIL t o cus t o m e r s s o t h e qu a lit y o f t he g as to be s u p p l ied t o t he c u st o mer i s don e a t var i ous s t a ti o n s a n d th e r e f o r e , it ca n n o t b e sa i d t h a t n a t u ra l g as m ov e d thro u g h H B J P i p el i n e f r om Hazira i s o n ac c ount of or i n pursuance of the agreement entered into by GAIL with customers.

• The gas is not directly supplied to the customers from HBJ Pipeline;

• W h e n the g a s reaches t o t h e c ustomer p l a c e s in big d i ametric pipeline, there is one station installed by GAIL at the premises of the customer, where same gas

is further processed and then thereafter through 18″ diameter pipeline gas further goes to supply point and from that point it is supplied to the customer.

[ 8 . 7 ] F r o m t h e m a t e r i a l on recor d a n d th e tran s a c t i o ns by G A I L , i t a ppear s t h at t he resp o nd e n t G A I L a f t e r p u r c h a sin g the gas on pa y m ent o f local sales t a x in S t a te of Gujarat , tak e s i t to it s Hazi r a p remi s es f r o m where after carrying out certain process including compression puts in HBJ pipeline. That t h e r e a f t e r t h e H B J p i p e l i n e g o e s t o V a g h o d i a i n G u j a r a t , J h a b u a , K h e r a a n d V i j a p u r i n M a d h y a P r a d e s h a n d P a t a a n d A ur a i y a i n U t t a r P r a d e s h a n d f u r t h e r R a j a s t h a n , D e l h i a n d H a r y a n a e t c . That at the time of putting gas in the HBJ pipeline it is not appropriated towards any of the 218

c o n s u m e r s a t t h e r e l e v a n t t i m e v i s −à −v i s a n y

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p a rt i c u lar qu a n t i t y a n d t h e m o v e m e n t o f g a s h a s n o t b e e n o c c a s i o n e d towards any contract of sale. After supplying gas at Vaghodia in Gujarat, the balance quantity m o v e s f u r t h e r t o M a d h y a P r a d e s h a n d t o U t t a r P r a d e s h ( a s p e r t h e d i a g r a m a t P a g e 6 2 8 ) w h e r e , a f t e r r em o v i n g L P G , p rop a n e , p e n t e n e , n a p h t h a , C 2 C 3 e t c . o n w h i c h a p p r o p r i a t e e x c i s e d u t y i s p a i d , t h e r e m a i n i n g l e a n g a s i s t h e n s u p p l i e d t o i t s v a r i o u s c o n s u m e r s through the pipeline installed by the respondent GAIL and from its own station. Thus, from the beginning till the gas is supplied to the consumers, the gas remains in the custody and ownership of the respondent No.1 – GAIL. It can also be observed that till the gas reaches at

G a s M e t e r i n g S t a t i o n a t t h e p r e m i s e s o f t h e c o n s u m e r a n d t h e consumer takes the delivery of gas, no appropriation takes place. Thus, movement of gas pursuant t o t h e c o n t r a c t o f s a l e w i t h t h e p a r t i c u l a r consumer takes place only when the consumer assents to take delivery of gas of particular quality and quantity and the gas thereafter moves further from metering station. Until such time, GAIL retains right of diversion of goods and gas is capable of being diverted

to any other consumer. At this stage it is required to be noted that even GAIL has paid sales tax l e v i a b l e i n d i f f e r e n t S t a t e s w h i c h i s m u c h h i g h e r t h a n t h e

C e n tr a l S a l e s T a x , d e m a n d e d b y t h e p e t i t i o n e r . T h e r e f o r e , t h e l e a r n e d T r i b u n a l h a s r ig h t l y h e l d t h a t t h e t r a n s a c t i o n s i n q u e s t i o n a r e B r a n c h Transfer / Stock Transfer and cannot be said to be inter−State sale.

[ 8 . 8 ] T h e f i n d i n g s a r r i v e d a t b y t h e l e a r n e d T r i b u n a l a r e n o t o n l y b a s e d on appreciation of evidence led by both the parties but also after site inspections carried out by t h e l e a r n e d T r i b u n a l i t s e l f . T h e A p p e l l a t e T rib u n a l is a s t atut o r y Tr i b u n a l s p e c i f i c a l l y c o n s t i t ut e d u nde r t h e G S T A c t t o d e c i d e t axa b i l i t y of t r an s a ct i o n s e i t h e r u n d e r t h e G S T A c t o r CS T Act and is, therefore, conferred with the appellate powers to examine the factual and technical aspects involved in the transactions. The findings recorded by the learned Tribunal are on appreciation of evidence which are neither perverse nor contrary to the evidence o n r ec o rd . On f a c t s a n d o n ap p r ec i a t i on o f e v i d e n c e t he l e a r n e d T ribu n al af t er co n s i d e ri n g t h e d e c i s i o n o f t h e H o n ‘ b l e S u p r e m e C o u r t in t h e c as e o f M / s . B a l a b h a g as H u l asch a nd & A nr . ( Supra ) ha s obs e rved and hel d that the goods would fall under Case 2 as enumerated in the aforesaid decision and thereafter has specifically come to the conclusion that transactions would not amount to inter − State sales.

[ 8 . 9 ] N o w , s o f ar a s t h e r e lia n c e p l a c e d up o n th e d e c i s i o n o f the Allahabad High Court in the case of Reliance Industries Ltd. (Supra) is concerned, we are of the

o p i n i o n t h a t o n f a c t s a n d c o n s i d e r i n g t h e transac t i o n s in t he p r e s e n t c a se a s w ell as t h e t r a n s a c tions w h i ch w e r e before the High Court in the aforesaid decision, the transactions in the present case are not c o m p arab l e . T h e ref o re , considering t h e fi n din g s r ecor d e d b y t he le a r n e d Tr i b u n a l wh i le h o l ding th a t t h e t r a n saction s i n q u e s ti o n can be said to be Branch Transfer and cannot be said to be inter −State sale, on facts the

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d e c i s i o n s r e l i e d u p o n b y t h e l e a r n e d Co u n s el a p p e ar i n g on b e h a l f of t h e p e t i t io n er r e f e r r e d t o h e r ein a b o v e shall not be applicable to the facts of the case on hand.

[ 8 . 1 0 ] L e a r n e d Trib u n a l h a s given cog e nt reasons a nd h a s given the specific finding after long drawn reasoning and therefore, the same are not required to be i nt e r f e red by thi s C o u r t i n e x e r c i s e o f p o we r s under Article 226/227 of the Constitution of India.

[ 9 . 0 ] I n vie w o f t h e a b o ve a n d f o r t h e r e a s o ns s t ated a b o v e , a l l t h e s e Sp e c i a l C i v il A pplic a tio n s fai l a n d the sam e deserv e to b e d i smis s ed a nd are, accordingly, dismissed. Rule is discharged in each of the petitions. No costs.

Sd/− (M.R. SHAH, J.) Sd/− (B.N. KARIA, J.) Ajay**

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