'Pandemic Not An Excuse, Give Genuine Reasons' : Kerala High Court To Centre Over Non-Inclusion Of Petroleum Products Under GST

The Kerala High Court on Tuesday was discontent with the reasons given by the Goods and Services Tax Council for its decision to not include petrol and diesel within the ambit of GST.

A Division Bench of Chief Justice S Manikumar and Justice Shaji P Chaly denied the council's justification that the pandemic prevented them from deliberating on the subject since it has heavy implications on revenue.

"We are not satisfied with the reasons. There should be some discussion and genuine reasons, as to why petroleum products cannot be brought under the GST regime. Further, pandemic period cannot be cited as a reason. It is well known that even during pandemic period, several decisions were taken involving revenue, after deliberations." 

Therefore, the relevant authorities were directed to file a detailed statement with sound reasons for not including petrol and diesel under the GST.

The Court made the observation while hearing a PIL filed through Advocate Arun B Varghese, which stated that the recent hike in petrol and diesel prices has wreaked havoc, on general economic stability and the lives of the common man, especially those from lower-income households.

It was contended that the non-inclusion of petrol and diesel under the GST regime is violative of Articles 14 and 21 of the Constitution of India.

The Court had taken note of an earlier decision where it was held that the GST council cannot be mandated to make any decision and, therefore, chose to only direct the GST Council to forward the representation to the Union to take an appropriate decision.

However, once the representation submitted by the petitioner was considered by the GST council at its 45th meeting, it decided that it is not appropriate to include petrol and diesel within the ambit of GST at this stage. This was then vehemently opposed by the petitioner who once again moved the Court by way of the present plea.

At the previous hearing, the Court had directed the GST Council to file a statement developing the reasons for its decision.

During Tuesday's hearing, Standing Counsel for the Central Board of Indirect Taxes and Customs PR Sreejith handed over a copy of the letter from the Director of GST Council to submit that petroleum products could not be brought under the GST regime.

The letter stated that the matter was taken in the 45th GST Council meeting.

The Court noted that three issues seemed to have been considered by the Council, for bringing petroleum products under the GST regime:

(1) the matter involves high revenue implications

(2) requires larger deliberations

(3) during pandemic times, it would be difficult to bring petroleum products under the GST regime.

This did not find favour with the Court which opined that the pandemic cannot be used as an excuse for such a decision and directed the Council to elaborate on its reasons.

Case Title: Kerala Pradesh Gandhi Darshanvedhi v. Union of India

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