THE PUNJAB and Haryana High Court on Thursday issued a notice to the Centre and Punjab in a petition filed by a group of transport companies against the hike in excise duties and VAT on petrol and diesel. The notice was also issued to the Petroleum and Natural Gas Regulatory Board, GST Council and various fuel companies. The division bench of Justices Ajay Tiwari and Jasgurpreet Singh issued the notice to the parties for August 13 in the case filed by New Prince Carrying Corporation and seven others from Amritsar through advocates Piyush Kant Jain and Viren Jain.
The notifications, which have come under challenge, include the one issued by the central government on March 13, whereby the ‘Special Additional Excise Duty’ on petrol and diesel has been increased by Rs 2 per litre, the notification issued on the same day, whereby ‘Additional Excise Duty’ (Road and Infrastructure Cess) on petrol and diesel has been increased by Rs 1 per litre; the one issued May 5, whereby the central government increased ‘Special Additional Excise Duty’ by Rs 2 per litre for petrol and Rs 5 per litre for diesel, and the notification issued on May 5 whereby Additional Excise Duty (Road and Infrastructure) has been increased by Rs 8 per litre each for petrol and diesel.
The Punjab government’s notification dated June 15 increasing the Value Added Tax (VAT) to Rs 24.79 per litre for petrol and Rs 15.94 for diesel has also been challenged in the petition, which seeks directions for declaration of the date for bringing petrol and diesel within the ambit of GST regime.
“The operation of the economic system by the state in a manner which is prejudicial and detrimental to common good is against the constitutional ethos,” the petition has contended, adding that the governments have been inflicting “rude shocks” on people since March this year.
The petition has stated that the maximum average monthly price of crude oil was $71 per barrel in April 2019 and the minimum price was $59.35 per barrel in August 2019 but in March 2020, the average monthly price of crude oil fell to $33.36 per barrel. “As per the aforesaid regime of fee price mechanism, the consumer retail price of related petroleum products including petrol and diesel were liable to manifest a downward trend with the fall in main raw material,” the petition argues, adding that the average monthly price of crude oil further fell to a low of $19.90 per barrel in April and then was $30.60 in May.
Submitting that they, on the basis of declared policies and laws, had legitimate expectations to have succour from the fall in prices of crude oil, the transport companies in the petition said the benefit instead has been snatched away by adopting “distortionary actions causing immense deprivation”. The “untenable logic” behind such “draconian actions of the state” is to finance the government expenditure amid falling revenues due to the Covid-19 pandemic, said the petition.
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