THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN T.R.C.Nos.192 and 202 OF 1998 COMMON ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) These appeals under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957, (APGST Act), are preferred against the order of the Sales Tax Appellate Tribunal (STAT) in T.A.Nos.843 and 842 of 1997 dated 15.5.1998. The respondent assessee – M/s Gas Authority of India Limited (GAIL) was, originally, granted exemption of the entire turnover on the ground that the sales effected by them were the second sales of gas purchased from ONGC. The Deputy Commissioner (CT), Kakinada revised the assessment order and held that M/s. GAIL were merely the agents of ONGC; transfer of gas from ONGC to GAIL did not amount to first sale within the State; and sale by GAIL, in turn, to their customers was the first sale in the State exigible to tax as goods falling under Entry 118 of the First Schedule to the APGST Act whereunder the goods were liable to tax at the point of first sale within the State. While the respondent assessee contended that they had purchased goods from ONGC, and the sales effected by ONGC to them constituted the first sale within the State, and sale by them to their customers was the second sale; the petitioner herein contended before the STAT that the respondent - assessee was merely an agent of ONGC and, as such, it was only the sales effected by GAIL to their customers which constituted the ‘first sale’ in the State. The STAT, by an elaborate order, went into various clauses of the memorandum of agreement entered into between ONGC and the respondent-assessee; the nature of the transactions, including the sales invoices wherein the price charged by ONGC was treated as purchaser’s price and the price payable on sale was treated as the consumer price; M/s GAIL was required to pay interest on belated payment to ONGC; ONGC charged producer’s price i.e., base price + royalty + sales tax from GAIL, and the latter charged from their consumer not only the producer’s price but also transportation charges ‘on its own account’ which were not passed on to ONGC; a minimum guarantee off-take was specified in the memorandum of understanding etc; and held that, seen in the totality of the mutual behaviour of ONGC and GAIL, both of them should be treated as the vendor and the vendee. The STAT concluded by holding that the respondent – assessee was not an agent of ONGC, but had all the rights and obligations of a vendee with respect to ONGC, the vendor; they had to pay ONGC for a minimum contracted quantity everyday, including for gas short lifted, at a fixed price; they were bound to pay penal interest on delayed payment; they had absolute rights to sell gas to their customers, but at the price fixed by the Government; they were also under an obligation to keep ONGC informed about future contracts with their customers, and with any ensuing litigation; they were obligated to collect gas pool charges on behalf of the Ministry of Petroleum; they were entitled to collect transportation charges pertaining to maintenance of pipe-lines, and to retain it on their own account; they were collecting consumer price from their consumers which was higher than the producer’s price; they were not rendering account for the ultimate consumer price, nor for the transportation charges, to the vendor - ONGC to whom only the producer’s price was being paid; as per the memorandum of understanding the respondent-assessee was due to receive marketing margin retrospectively; but, in all the records placed before it, there was no mention of such a margin having been received; in any case receipt of marketing margin, over and above transportation charges, on its own account did not make the respondent-assessee an agent; the respondent-assessee was also responsible for damages with regards gas in their custody; the custody transfer took place at the well - heads of ONGC; and the respondent dealt with the gas as their own. Considering the totality of the facts and circumstances, the STAT answered the question raised in the negative, in favour of the respondent – assessee, and against the Revenue. It is also evident from the order of the STAT that ONGC has paid sales tax treating the sale made by them to M/s GAIL as the first sale within the State. Interference by this Court, under Section 22 of the APGST Act, is only when the STAT, in its order, has decided erroneously, or has failed to decide, a question of law. The findings recorded by the STAT is based on the evidence on record and can neither be said to be perverse nor as based on “no evidence”. The order of the STAT does not suffer from any error of law. It is also not the case of the Revenue that the STAT had failed to decide any question of law. We see no reason, therefore, to interfere with the order impugned in these revisions. Both the Tax Revision Cases are, accordingly, dismissed. _____________ V.V.S.RAO, J ___________________________ RAMESH RANGANATHAN,J 09.02.2011 asp