IMPORTANT POINT
Without proof of supply of goods or services, the demand for GST is unjustified, and penalties imposed under the Marketing Discipline Guidelines were properly adjudicated.

JUDGMENT :

Harisankar v. Menon, J.

These writ petitions are filed by distributors of LPG appointed by the 1st respondent herein challenging orders imposing penalty, appellate orders, as also the Marketing Discipline Guidelines, 2018 (hereinafter referred to as “MDG”) under which the penalty is imposed.

2. By judgment dated 12.12.2024 in W.P(C) No.9331 of 2020 and con. cases, I have repelled the challenge against the MDG.

3. The petitioners have further challenged the imposition of penalty in these cases as confirmed by the appellate authority. In W.P(C) No.2552 of 2021, penalties were imposed by Ext.P10 order issued by the 2nd respondent with respect to a complaint raised by a consumer/customer alleging non-attendance of a leakage complaint. The petitioner has raised a contention to the effect that there was no deliberate non-attendance of the complaint as alleged, that the complaint was received at its end only on 21.8.2020 by 4:33 pm, that the complaint was attended by the mechanic through a telephone call by 5:30 pm/5:45 pm etc. However, those contentions appear to have been properly adjudicated by the original authority and the appellate authority. In a writ jurisdiction, the appreciation of evidence in that regard cannot be carried out.

4. In W.P(C) No.11912 of 2021, the penalty is imposed by Ext.P5 order issued by the 2nd respondent. The allegation in Ext.P5 is with reference to certain LPG connections provided by the petitioner. It appears that the explanations offered have been examined in detail by the original authority while issuing Ext.P5 order. The appellate authority, while issuing Ext.P10, has also considered each and every contention raised by the petitioner herein. The appreciation of evidence/contentions by the original/appellate authority cannot be found fault with.

5. The only other subsisting challenge arising for consideration in these writ petitions is as regards the demand of GST (Goods and Services Tax) by the impugned orders in these cases. In W.P(C) No.2552 of 2021, while issuing Ext.P10, an amount of Rs.28242.45 has been imposed as GST and it is sought to be recovered from the petitioner. In W.P(C) No.11912 of 2021, the respondent Corporation, while issuing Ext.P5, has sought to demand Rs.22,140/- towards GST.

6. Sri. Surendran, the learned counsel for the petitioners in these writ petitions would contend that the demand of GST as above was without any justification and arbitrary. He points out that there is no “supply of service” so as to demand GST from the petitioners. The learned senior counsel, Sri.Nandakumar, on the other hand, relies on the counter affidavit filed as well as the Notification No.11/2017- CT(R) dated 28.6.2017 issued by the Ministry of Finance, Government of India, to support the demand for GST as above.

7. The goods and services tax is levied with reference to the provisions of the CGST Act, 2017/SGST Act, 2017 (for short, the ‘Act’). The preamble to the afore Act would show that the Act was introduced to make provisions for the levy and collection of tax on the “supply of goods or services or both”. Therefore, it is to be proved that there is either:

i. Supply of goods

ii. Supply of services

iii. Supply of both

to demand GST. There cannot be any dispute that there is no supply of goods involved in the case at hand. The term “services” has been defined under Section 2(102) of the Act as under:

(102) ?”services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.

The provisions of Chapter III of the Act provide for levy and collection of tax. Section 7 provides the “scope of supply” as under:

“(1) For the purposes of this Act, the expression “supply” includes––

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, r