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
